Anti-money laundering, or AML, might look the same from the outside, but inside, it behaves very differently. The work at a private bank does not transfer cleanly to a fintech serving payment processors or to a consumer lending platform. In short, the label is the same; the job is not.
Sten Pärnik has done the job at all three. After starting at SEB Estonia in private banking AML, he moved to LHV to handle institutional clients such as payment service providers, e-money institutions, and virtual asset providers. There, he built the AML operations team from scratch. He then spent more than three years as Head of AML and Money Laundering Reporting Officer (MLRO) at Bondora, rebuilding the consumer lending platform’s financial crime compliance framework.
He has now joined Wallester as Head of AML Investigations. Card issuing is a different shape again, and one of the faster-growing parts of European fintech. In this interview, Sten explains how AML changes from one context to another, and what financial crime compliance needs to look like at a B2B card issuer and embedded finance company.
Interviewer: How did you come to AML? You had done a police internship and had just finished your law degree at Tartu. What drew you towards financial crime work specifically?
Sten: My interest in financial crime stems from my academic focus on organised crime, criminology, and criminal psychology. While I initially considered a career as a prosecutor and planned to start in the police force to understand the legal system from the ground up, life steered me in a different direction.
While completing my degree, I took a customer support role at SEB Bank, where an internal opportunity for an AML Risk Manager position arose. This role perfectly aligned with my interest in investigating criminal patterns, and I have focused on financial crime compliance ever since.
Interviewer: You have worked in AML at three quite different institutions: SEB in private banking, LHV with institutional clients including payment service providers and crypto firms, and Bondora in consumer lending. How much of what you learned at one place carried over to the next, and where did you essentially have to start fresh?
Sten: Fundamental AML knowledge certainly carries over, but the specific application and experience are absorbed uniquely at each employer. You accumulate habits and cultural insights from every role, and the key is to turn those diverse experiences into a professional asset by assessing how different systems and teams operate effectively.
If I were to highlight something unique I learned from all three employers:
SEB – Build a network inside the company. Your colleagues are your biggest asset. They know things that you do not – use that. Build positive relationships and maintain them. Share your knowledge, be a reliable and trustworthy partner to them, and you will see how it is paid back in full. Trust is a valuable commodity.
LHV – Go a step further. Your competence as a specialist, and your growth, are only limited by your willingness to take extra steps, ask questions, and learn more. Take ownership and show initiative. Show your employer that you are the man or woman who can be used as an example and should be elevated to a role where that ownership and initiative can be put to good use.
Bondora – Know your limits and learn to delegate. The success of the company is not only your burden. It should not be a limited number of high performers or achievers carrying the weight. If it becomes too much, do not be afraid to take a step back and reassess.
For me, Wallester is a fresh start. Before starting here, I took some time off to rest. In addition, my current role focuses more narrowly on a specific area of AML, rather than being a more generalist role where you are expected to manage and fix all things related to AML on your own.
Interviewer: At LHV you built an AML operations team from scratch. At Bondora you rebuilt the framework. When you start a new function from a blank page, what gets done first? Is there something that, if you do not get it right early, becomes very hard to fix later?
Sten: Map out the general picture, use it to add context to your vision, make the vision as ideal as possible, and then fine-tune it based on what is actually achievable and realistic. It always helps to identify the time criticality of shortcomings and set focus areas.
Without a proper understanding of shortcomings and a clear vision, it becomes difficult to plan resources and the changes that are needed.
Interviewer: Card issuing is the new one for you. What do you think it will ask of an AML function that the previous roles did not?
Sten: Card issuance presents a specialised set of risks that require a deep understanding of card payment processing. While my previous focus in traditional financial institutions revolved around bank and wire transfers, I am now focusing on the nuances of card-based financial crime.
It is an exciting area of specialisation, and I intend to leverage the significant internal expertise at Wallester to master these new skills and improve my knowledge.
Interviewer: At LHV and Bondora your work included direct engagement with regulators. What makes that kind of relationship work well in your experience, and what tends to undermine it?
Sten: The relationship balance between the regulator and market participants is delicate. On one hand, you have the market participant, whose primary goal is to be as profitable as possible, while on the other hand you have the regulator, which exists as a critical supervisory force by enforcing rules that can either make or break the business.
What market participants always need to consider is that the regulator might not, and often does not, understand the specifics of the business, whether that is the products or services offered. This is especially true for new and emerging industries, services, or products. This is where open communication and a willingness to cooperate are a must. Otherwise, you run the risk of the regulator giving damaging assessments in areas that could have been avoided through clear and explanatory communication.
In my view, there is room for constructive cooperation with the regulator, albeit in a limited manner due to the nature of the regulator’s role as a supervisory institution. This has been a noteworthy issue across the market in general.
Interviewer: Transaction monitoring is one of the most automated parts of compliance. Has the rise of tooling made the human side of the work easier, or just changed what the humans are needed for?
Sten: I would argue that sanction screening is, or can be, more automated than transaction monitoring. While it is true that there are now more advanced tools readily available on the market, it seems to me that a significant number of businesses are either too slow or not willing to use these tools. Whether it is the size of the business operation and the costs related to integrating these services and tools, an attitude of “but we have always been doing it this way”, or a lack of clear understanding of to what extent and how to integrate these tools into current processes, the hesitation is still there.
Regulators themselves tend to be very conservative in allowing automated, especially AI-based, solutions to be used for certain flows, and they are often not willing to indicate clearly what can and cannot be used. Transaction monitoring has a multitude of different layers to consider.
I am completely on board with saying that using AI-based or automated tools for data analysis, data aggregation, and writing initial analysis reports or reviews based on available or customer-provided data would be a significant help in easing the burden of manual labour. At the same time, I would be extremely cautious about using AI or any other automated solution to make final decisions related to individual cases. In that regard, I would argue that it goes against regulatory expectations to use such tools in that manner.
Furthermore, considering that AML handles a significant amount of customer data as part of its responsibilities, some of it delicate, there is also the question of whether this is in line with GDPR. That would need a business-by-business analysis to determine the extent to which such tools can be used and under which conditions.
Humans, at least in the foreseeable future, will still remain the final decision-makers in establishing whether cases are suspicious or not.
Interviewer: The MLRO role tends to be misunderstood from outside compliance. Could you walk us through what a typical day actually involves?
Sten: In my previous role, the MLRO position was only a fraction of my overall responsibilities. Because the role is so integrated into the broader compliance framework, every day was chaotic and atypical.
Interviewer: What drew you to Wallester, and what made the timing right?
Sten: The primary reason is Aivar Paul, Wallester’s Chief AML Officer and Board Member. We worked together side by side at LHV, and he was my direct manager for some time. There were times when we discussed this, but the timing did not feel right and I was not strictly looking to change employers, because I felt there were still things I could accomplish there.
At a later date, when I was ready to move on, I accepted the call, as I saw that there is a strong drive to do proper AML at Wallester, and that the chance to be part of a strong, experienced team would give me a further chance to grow my competence and skills.
Interviewer: Looking ahead twelve months, what would you most like to have in place?
Sten:Over the next twelve months, I would most like to have a strong and efficient team, clear process guidelines and manuals, efficiency metrics to ensure that we can systematically react to problematic areas, and improved AML and fraud tools so the team has whatever it needs to perform at its best, while reducing wasted time on noise and false positives.
Interviewer: You went from customer support to MLRO in five years. For someone considering AML as a career today, what advice would you give them?
Sten: Think outside the box, show initiative, take ownership, love what you do, and push yourself to improve. It is also key to understand that, as a risk function specialist, you need to maintain a healthy relationship with business and tech units. Your job is not to block growth and innovation, but to support that growth and innovation in a risk-conscious manner by being a reliable and effective partner.
Interviewer: Outside of work, where does your time tend to go?
Sten: Video games, the gym, metal and rock concerts and festivals, playing the drums, the Estonian Defence League, and a hefty amount of karaoke. When I get the chance, I also like to watch movies – especially 90s action films, fantasy, and sci-fi – and I have a few TV shows I keep an eye on.
