In an economic and regulatory environment where compliance resources and budgets are stretched thin, financial institutions must carefully evaluate their priorities when it comes to their BSA/AML program. Currency transaction reports, enhanced due diligence reviews, board reporting, and suspicious activity monitoring are just a few of a BSA team’s responsibilities. All requirements of a risk-based BSA program are crucial to the safety and soundness of your institution, so what should banks and credit unions prioritize when resources are strained?
Suspicious activity monitoring is the cornerstone of a strong BSA/AML reporting system. As stated by the Federal Financial Institutions Examination Council (FFIEC), transaction monitoring and reporting are critical to the United States’ ability to combat financial crime. Suspicious activity reports (SARs) assist law enforcement in deterring illegal activity, but financial institutions may wonder whether they are expected to detect and examine every unusual transaction that comes through their doors.
The Financial Crimes Enforcement Network (FinCEN) and federal bank examiners understand that financial institutions can't detect all suspicious transactions, but solid policies, procedures, and processes must be in place to monitor higher-risk products, services, and customers’ entities, and geographies. This means that financial institutions’ suspicious activity monitoring systems must be risk-based and efficient.
