MidCountry Bank Slashes False Positives, Improves Alert-to-Case Ratio with BAM+
Many financial institutions have implemented automated transaction monitoring systems to help BSA professionals identify suspicious activity, but not all BSA/anti-money laundering (AML) software is built the same. When MidCountry Bank, a regional community bank in central Minnesota, switched to Abrigo’s BAM+, they immediately slashed the number of false positive alerts it had been receiving with its previous provider.
“We went from thousands of alerts a month to hundreds,” said Chad Winker, BSA Officer at MidCountry Bank. “We used to have a whole lot of false positives.”
With their previous FinCrime management solution, the BSA department was constantly chasing down low-quality, duplicative alerts. Now, when MidCountry Bank gets an alert with BAM+ they can trust that it’s significant and worth spending time on. Winker says that their time is used much more efficiently now.
“Our alert-to-case ratio has noticeably improved. We were at less than 1% alert-to-case with our prior provider, and about 2% of cases were going to SARs,” said Pam Carl, Chief Risk Officer at MidCountry Bank. “Now, our alert-to-case ratio is around 6 to 8%, and the majority of those are going to SARs. We still have room to improve, but the ease of use and common-sense methods of the scenario engine will make it easy for us to continue improving that ratio.”
Automation can be a huge efficiency gain for BSA departments, but it’s critical that the software is able to capture risk accurately. With many out-of-the-box solutions, it can be difficult to know what is causing an alert to happen. Even when there are false positives with BAM+, Winker says there’s still proof that the correct parameters are in place to keep the bank safe from risk. The transparency of BAM+ makes it easy to understand and explain why alerts are taking place – key to impressing examiners and auditors.
“We’ve gone through an exam and a BSA audit with BAM+ and received very favorable results and feedback from both” Carl said. The auditors were the same MidCountry had used historically, and they were impressed by the improvements and growth the bank had made over the year. “They commented on the growth of our program that we’ve experienced using BAM+. There was enough year-over-year from their perspective to see that we’ve already been able to see significant improvements.”
Like the benefits of automating alerts, streamlining case management has greatly increased efficiency for MidCountry Bank. Unlike their previous system, MidCountry can easily file CTR and SAR batches directly to FinCEN to save critical time. “I don’t have to open up anything else. I have one thing open, file it, and then it’s done,” Winker said. With BAM+, Winker can continue to work while reporting without worrying about bogging down the system.
Reducing false positives is just one of the many improvements BAM+ has generated for MidCountry Bank. Before the bank had implemented BAM+, it was using folders on the network, grabbing screenshots, managing excel documents, and writing lengthy reports for due diligence. “Now, all of that just come right into the system,” Carl said. “The amount of time savings – especially in the EDD space – is just incredible.”
Abrigo’s Due Diligence Manager (DDM) helps financial institutions streamline and automate customer due diligence (CDD) and enhanced due diligence (EDD) processes in one system. This has also improved communication between front-line staff and the back office – a critical component of an effective, sound BSA program. Winker noted BAM+ is “easy to maneuver,” which has helped adoption among BSA staff and front-line staff. Front-line staff at MidCountry Bank have access to file questionable activity reports (QAR) to the BSA department.
“Pretty much all of our front-line staff now have access to the QAR to enter reports for us. It’s given our front-line more access to compliance to let us know when something is going on that we might not be able to see right away or based on what the customer might say instead of just an alert based on a transaction,” Carl said. “That process has helped front-line staff become more aligned with the compliance department and thinking about risks that could affect the bank and for our customers.”
These improvements allow more employees to engage with the program and enhance the way the bank manages the workflow.
Flexibility to grow without straining resources
Abrigo’s BAM+ has enabled MidCountry Bank to strengthen its BSA program and streamline many time-consuming processes. While there are many anti-money laundering software solutions available today, MidCountry Bank has found that BAM+ sets itself apart.
Winker notes that BAM+ is “so easy to maneuver,” thanks to the ease of use, customizability, and ability to drown out the noise of false positives. And if Winker ever has an issue or a question, he knows he can quickly go into Abrigo Community to get an answer back right away. “It was always hard to get other people on the line if I had an issue with a previous vendor,” Winker said. “It’s really easy to work with [Abrigo]. They’re not afraid to call if they need more clarification. Pretty much anything we’ve ever had an issue with has been resolved immediately.”
Carl echoes the importance and availability of Abrigo resources.
“From user guides to release notes, Abrigo Community, the availability of [Abrigo’s] staff, the caliber of training – those things really stand out. It is truly a superior product.”
Carl and Winker noted their appreciation for the robustness of BAM+ while leaving out the overcomplication and high price tag other solutions are known for.
“[BAM+] is a common-sense approach to managing the BSA program. Everything’s very approachable,” Carl explained. “There’s a lot of plain language throughout the system. The workflows make sense – they’re clear. You can dive into any scenario and easily understand what it is and what it’s supposed to be. Other programs utilize random codes and digits – you have to be a Rhodes Scholar to be able to understand what is actually happening with those scenarios, and in BAM, it’s just really straightforward.”