Top Reasons to Promptly Upgrade Your AML Software

Terri Luttrell, CAMS-Audit
May 4, 2020
Read Time: min

Have you wondered why your smart phone continues to notify you of application updates as soon as they are available? The reason for the notifications is due to the importance of the updates. While many are minor application enhancements, some are bug fixes or critical cyber security enhancements that should be updated immediately.

How does this smart phone analogy translate to your AML software solutions? Vendors routinely release upgrades and service packs as needed for urgent regulatory changes or bug fixes. Some financial institutions have large, supportive IT departments to handle upgrades swiftly and accurately. Let’s face it, most community financial institutions don’t get the IT support needed when it comes to their AML software. Although AML is a critical function of the institution’s safety and soundness, to the IT team is seems like a small portion of the banking software they support.

Why should you upgrade your AML software promptly upon release?  Below are top three reasons to keep your AML solutions (and all software) versions up to date:

Regulatory Impact

If there has been a regulatory change or update, your vendor should be staying on top of official notifications and providing you with compliant software before any mandatory compliance date. The BSA community recently saw this with FinCEN SAR and CTR changes, and if upgrades had not been performed SARs and CTRs would have been rejected by FinCEN, causing serious regulatory issues.

Examiner Expectations

As with many aspects of BSA and IT examinations, regulatory expectations are evolving based on issues seen within the industry. Examiners must ensure that your financial institution is working with the latest version of their software applications. This is now a common question in an exam and if your institution is not up to date with upgrades, your institution will be subjected to some degree of regulatory criticism.

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Enhanced Functionality

As stated above, no regulatory requirements or guidance has changed with these updates. The revisions were designed to give greater transparency and to clarify within the Exam Manual that examiners should use a risk-focused approach to BSA/AML program examinations. The updates, however, did not remove the subjectivity of the term “risk-focused” approach.

For those financial institutions thinking that it is not practical to upgrade or install service packs promptly due to lack of IT resources and are currently hosting your own data, hosted solutions may be the solution for your time constraints. When your AML software is hosted with a secure vendor, they will handle all upgrades and service packs with seamless updates to your AML systems. Let your vendor do the work for you. The Federal Financial Institutions Examination Council (FFIEC) recently issued a joint statement regarding security in a cloud computing environment citing expectations in a hosted environment to ensure that your data is secure. 

Learn more about Abrigo's BSA/AML and fraud monitoring solution, BAM+. 

About the Author

Terri Luttrell, CAMS-Audit

Terri Luttrell is a seasoned AML professional and former director and AML/OFAC officer with over 20 years in the banking industry, working both in medium and large community and commercial banks ranging from $2 billion to $330 billion in asset size. She has successfully worked with institutions in developing BSA/OFAC programs, optimizing various automated solutions, and streamlining processes while ensuring all regulatory requirements are met. As the Compliance and Engagement Director at Abrigo, Terri provides insights that contribute and support long-term banking strategies based on analysis of market and industry trends, competitor developments, and financial and regulatory technology changes. She is an audit-certified anti-money laundering specialist and a board member of the Central Texas chapter of the Association of Certified Anti-Money Laundering Specialists (ACAMS). Terri earned her bachelor’s degree in business administration, specializing in business and finance, from the University of North Texas.

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