In 2020, Improve Your BSA/AML Program by Focusing on These 4 Areas

Andres Tapia, CAMS, GAMS, CFE
November 21, 2019
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As another busy year draws closer to an end it is time to reflect on the challenges and successes of the year. It is also time to start thinking about planning and to begin sharpening the ax for next year. As BSA officers, we have continuous expectations placed on us to be knowledgeable in all aspects pertaining to Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance. Given the time constraints of our day-to-day operational responsibilities, we need to be selective in how we use any spare time to improve our BSA/AML programs and/or enhance our industry knowledge. I would recommend focusing your precious time in 2020 on the following four categories for professional development and enhancing your financial institution’s BSA/AML program:
  1. Continuing education
  2. Communication
  3. Assessing institutional risk
  4. Sustainability of the BSA/AML program

Plan BSA/AML continuing education for 2020

Continuing education is critical for BSA/AML compliance professionals. In fact, continuing education or training is one of the pillars for any BSA/AML compliance program. I strongly recommend that if you have not done so already, sign up for a compliance AML certification. Some of the more prominent certifications that are industry-related are Certified Anti Money Laundering Specialist (CAMS), Certified Fraud Examiner (CFE), Certified AML and Fraud Professional (CAFP), and Certified Regulatory Compliance Manager (CRCM). Aside from giving you “street cred” among the people in the financial institution, these programs will increase your industry knowledge and provide networking opportunities with your peers.

If you already have certifications and need to obtain continuing education credits, I would focus on the following topics: cannabis-related businesses, cybersecurity and lending and underwriting. Banks and credit unions will continue to play catch up on assessing and mitigating their risks associated with cannabis until the federal government provides additional clarifying guidance. Cybersecurity will remain one of the larger risks posed not only to financial institutions but also to their customers. Financial institutions will need to continue to devote resources to protect themselves and their customers. AML professionals need to continue to familiarize themselves with these risks. The most recent trend I have been noticing is regulatory lean-in on lending and underwriting risks related to BSA and AML programs. This is a big change for us as compliance professionals, as most of us have traditionally had more exposure to the deposit side of the bank. Even if we are less familiar with it, we are expected to identify the AML risk related to credit and mitigate it with the controls we have available to us.

Communicate in 2020 to educate teams and clients

Communication is probably the most critical business element for success. As compliance professionals, many of us are generally not associated with our ability to give memorable speeches. We are, however, great writers as we spend an abundance of time documenting suspicious or non-suspicious activity as well as drafting policies and procedures and responding to audits and exams.  We need to use this skill to share our knowledge with our colleagues and our customers. Educating our teams and clients on the BSA and fraud red flags can mean the difference to a fledgling business surviving an attempted fraud or being used to launder money. These types of positive outreach can have material impacts on your organization. They convey transparency to both internal and external stakeholders. Possible outreach efforts should include advising your customers on how to submit referrals to your financial institution if they feel that there is something suspicious occurring.

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Enhance risk assessment efforts in 2020

The third item is also a critical item of focus as BSA officers: assessing risk. BSA/AML risk assessments are extremely important to our organizations. They are the starting point in developing our mitigating controls. We need to ask ourselves if the way we have approached these in the past will continue to not only identify all risk factors but will also satisfy regulatory expectations. I would recommend enhancing your risk assessment. Change it up. This could include obtaining additional statistical information and inserting visuals where applicable. As mentioned above, some regulators have started scrutinizing risk assessments that do not address credit and cyber risks to the organization. You want to make sure that these topics have the appropriate attention paid to them within the risk assessment. Finally, for the above-mentioned reasons, you may want to have someone else perform a risk assessment if you have been the one performing it continuously. This can provide a change of perspective and provide a template to follow going forward.

Ensure BSA program sustainability in 2020

The last item that should receive attention in 2020 has also been surfacing recently: sustainability of BSA/AML programs. Regulators want to ensure that you meet regulatory guidelines for safety and soundness of a financial institution. Some of the questions BSA examiners may be asking are:

  • Does the bank or credit union have enough skilled employees?
  • Is the financial institution still using a manual process or do they use automation to manage the program?
  • Do they have succession planning in place?
  • Is there a culture of compliance?

It would pay dividends to be able to answer these questions for your organization and your board. If you feel challenged answering any of these questions, please reach out to us we would love to help you out.

About the Author

Andres Tapia, CAMS, GAMS, CFE

Andres Tapia,  CAMS, GAMS, CFE, brings 15 years of financial service experience working with community banks ranging in asset size from $1 billion in assets to large regional banks of up to $125 billion in assets. Andres has managed retail and compliance teams and has gained experience in retail banking, private banking, fraud, physical security, and BSA/AML compliance. He has previously worked as a BSA/AML officer and implemented transaction monitoring software as well as core banking software programs. He is bilingual and, prior to joining Abrigo, formerly Banker’s Toolbox, managed multiple groups of compliance analysts and investigators at a financial institution along the US-Mexico border. Today, as Manager of Consulting, Andres leads the Risk Management Consultants for the anti-money laundering advisory division of Abrigo. Andres is a certified anti-money laundering specialist (CAMS), gaming anti-money laundering specialist (GAMS), a member of the Association of Certified Anti-Money Laundering Specialists (ACAMS), a member of the Institute for Certified Gaming Industry Professionals (ICGIP), and a member of the Association of Certified Fraud Examiners. Andres earned his MBA from Belmont University in Nashville.

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