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Back to The Basics: BSA Training – Part One

September 20, 2016
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Create a Strong Foundation – BSA Training

This is the first of a two part series that recaps our recent webinar, “BSA Foundation Training: Back to Basics.” The presentation was geared toward old and new BSA professionals looking to be comfortable, compliant and confident in their role. 
Missed the webinar? No worries! You can view it for free here.


What Does a BSA Officer Do?

As a BSA professional, you have a very important job. You protect the financial system by detecting possible money laundering, terrorist financing, fraud, elder financial exploitation, human trafficking and so on. You’re constantly busy investigating cases, training, preparing board reports, or preparing for exams. When you feel overwhelmed, it can help to remind yourself how critical you are to the entire monetary system of the United States.

Whether or not you’re new to the world of BSA, there is a lot of information to remember. In this month’s webinar, the Manager of Professional Services at Banker’s Toolbox walked us through a refresher course on all things BSA.

The Pillars of BSA

At the very basis of a BSA program are the five pillars. The pillars come straight from the FFIEC Exam Manual. Until recently, there were four pillars; a fifth was added in May of 2016. Every BSA program must adhere to the following:

  1. Internal Controls – Financial institutions are required to have board-approved policies, procedures and processes for all aspects of BSA/AML. However, since a BSA program is based on risk, this will not look the same for every financial institution. A small financial institution in rural Ohio will have very different risks from a large financial institution in urban Los Angeles, for instance.Examples of items to include when creating your policies and procedures are: EDD on higher risk products/services/geographies, board reporting of SAR activity, a BSA continuity program, training to implement a quality assurance or quality control process and so on. Remember, your policies and procedures should incorporate your institution’s risk.
  1. Independent Testing – Independent testing refers to your auditors: either internal or third party. The key here is “independent,” which means the party reports directly to the board, a designated committee, or a member of the board. The auditing party should not report to the President or BSA Officer. The audit will address the overall adequacy and effectiveness of the program (policies, procedures, etc.), the risk assessment (thoroughness, adequacy), reporting and record keeping requirements (SARs, CTRs, the five year retention rule), transaction monitoring (whether manual or automated), training, and so on.One area where regulators are finding many issues is the new account onboarding process as they relate to your Customer Identification Program (CIP). Many institutions are not adequately implementing effective CIP programs, so this is something that we, as a whole, should work to enhance.
  1. Designated BSA Officer – Every institution must have a designated BSA Officer who is appointed by the board. This individual must have the necessary experience to carry out the role. In many cases, this means appointing a higher-level individual – someone with a comprehensive understanding of BSA who can confidently speak to examiners about all areas of the program. He or she has to have authority and resources in order to make decisions and do the job effectively. This includes adequate and competent BSA staff.Missed the webinar entitled, “Help! I Need Somebody: BSA Staffing Assessments”? You can view it here for free.
  1. Training – Training is arguably the largest pillar. The BSA Officer is responsible for training the whole enterprise of the institution on BSA: the board, lenders, front line, etc. Training needs to be customized to each audience. As part of the customization process, make sure staff knows how BSA applies to their role. Furthermore, staff should be trained in a timely manner. It is critical that training is supported by the executive team and that its importance is instilled from the top (the board) down.Click here to view our latest white paper, “Building a Strong Culture of Compliance from the Top Down” in which we shared tips on how to make training fun and dynamic.


  1. Customer Due Diligence (CDD) Requirements – The fifth pillar is brand new. The new rule on CDD was officially announced in May of 2016 with a May of 2018 implementation date. Many of these CDD guidelines have been in the exam manual all along. However, there are some new items here that will require changes on your end, particularly for the process of identifying beneficial owners. From what Banker’s Toolbox has seen in the field, regulatory agencies will be asking you how far along you are in your preparation. They will want to see a plan in place ahead of time, so now is the time to begin preparing.Still have questions on the new CDD regulation? View our recent key takeaways on how to prepare.

To see part two of “BSA Foundation Training Takeaways,” click here. It discusses SARs, risk assessments, regulatory hot buttons and more. To learn more about what Banker’s Toolbox can do for new or challenged BSA programs, email [email protected].

About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

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