How to Proactively Combat Increasing Regulatory Enforcement

So, how can you protect yourself and your Financial Institution? It’s simple: be proactive.

Is there an area that your institution’s BSA program is lacking? Address that aggressively before it becomes the reason you get slapped with an enforcement action.

Proactively defend your program. Focus on its safety and soundness through strong internal controls and overall staff training. The FFIEC states internal controls should:

• Identify banking operations (i.e., products, services, customers, entities and geographic locations) more vulnerable to abuse by money launderers and criminals; provide periodic updates to the bank's risk profile; and provide for a BSA/AML compliance program tailored to manage risks;
• Inform the board of directors or a committee thereof, and senior management, of compliance initiatives, identified compliance deficiencies and corrective action taken, and notify directors and senior management of SARs filed;
• Identify a person or persons responsible for BSA/AML compliance;
• Provide for program continuity despite changes in management or employee composition or structure;
• Meet all regulatory recordkeeping and reporting requirements, meet recommendations for BSA/AML compliance, and provide for timely updates in response to changes in regulations;
• Implement risk-based CDD policies, procedures, and processes.

Click here for the complete list of what internal controls should cover, as noted by the FFIEC.

Build a culture of compliance that your entire staff, from top to bottom, buys into. Your staff should go through a BSA/AML training overview every year to help support your BSA efforts. Our Professional Services team can assist with this by hosting in-person or remote training for your staff, whether you are a BAM+ user/customer or not. We can do an all-encompassing BSA training or focus on teller groups, lending, the board of directors, etc. Contact us today to get more information on staff training.

Make sure your BSA program has strong monitoring and control systems in place to detect issues before they are discovered in examinations. Some of these issues include inadequate or missing parts of your written BSA policies and procedures, missing or incorrect portions of SAR and CTR forms, inadequate wording and investigation efforts on alerts, the need for a more streamlined software solution rather than manually monitoring all aspects of the BSA program, a lack of quality control function and not filing SAR or CTR reports in a timely manner. By the time an exam comes around, it’s too late to make these adjustments.

Additionally, the bank board of directors can really set the tone for BSA at your institution. If they are active participants and truly know the potential penalties and liabilities they face with a weakened program, you have a strong advocate in advancing and strengthening your BSA program.

We can help

As former bankers and BSA officers, we know that this can seem like a lot of extra work as you’re already getting asked to do more with less. To help lighten the load, Abrigo has a group of experts that can assess your BSA program and help address any issues, giving you renewed confidence in your program. We provide various services including BSA Exam Preparation, Enforcement Action Resolution, Suspicious Activity Monitoring, Temporary BSA Officer placement, and many more. We also offer custom projects, so if you have an idea or aren’t even sure of where to start, contact our Advisory Services team to complete a customer scope. While we’re proud of the software solutions we provide, we’re more proud of seeing our customers succeed in fighting financial crimes.