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Every year the Anti-Money Laundering/Bank Security Act (AML/BSA) Examination Manual undergoes revisions. This year’s revisions expand the discussion on providing banking services to money services businesses (MSBs).
The Financial Crimes Enforcement Network (FinCEN) has announced changes to its Secure Information Sharing Systems so that financial institutions can more easily show their compliance with law enforcement search requests.
The recent revisions to the Bank Secrecy/Anti-Money Laundering Exam Manual are being seen as a move in the right direction by those close to the subject. According to Sepideh Behram, Senior Compliance Counsel at the American Bankers Association, the revisions made to the 2007 version reflect “certain points of clarification.” The Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, Office of Thrift Supervision, and Conference of State Bank Supervisors revised the manual in collaboration with FinCEN, the administrator of the BSA. The Office of Foreign Assets Control (OFAC) collaborated on the revisions made to the section that addresses compliance with economic and trade sanctions administered and enforced by OFAC.
It’s an often heard comment by those in the banking industry -- the need for consistency in the examination processes that institutions must undergo. That message is being heard, and acted on. With the recent announcement by U.S. Treasury Secretary Henry Paulson of an initiative to ensure that compliance obligations are treated in a manner that helps avoid expenditures that are not commensurate with actual risk, the Federal Financial Institutions Examination Council (FFIEC) last week issued the revised Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual.
The Financial Crimes Enforcement Network released its 11th issue of the Suspicious Activity Report (SAR) Activity Review Issue 11 last week. With guidance from the BSA Advisory Group (BSAAG), the review covers the suspicious activity reports issued by financial institutions
If you ever thought that when you file a Suspicious Activity Report (SAR) that it is filed away with the other SARs, think again. SARs are an important and valuable part of the Bank Secrecy Act (BSA) data that law enforcement uses to build criminal cases. Financial institutions can read more on the enforcement actions taken by law enforcement in the latest edition of the SAR Activity Review.
A recent survey of banking executives showed the overwhelming majority plan to increase spending on automated Anti-Money Laundering (AML) transaction monitoring and on staff to help strengthen their compliance programs. Darren Donovan, head of KPMG’s Forensic Services said the survey, administered by KPMG during the Florida International Bankers Association Annual AML Compliance Conference, showed that some 75 percent of the respondents said they plan to either implement an automated AML transaction monitoring system, or upgrade their current one. Of the respondents, the 29 percent who said they don’t use automated tools, “They probably also stand a pretty good chance of missing things, due to level of information that must be processed,” said Donovan. The automated functions of an AML monitoring tool helps with aggregation, a manual process can’t do that,” he added. If an institution is deficient in AML regulatory examinations, “it is likely that they usually are deficient in other areas as well,” he noted. Regulators need to have the ability to “look back” at transactions over a period of time, on a historical level for the purpose of detecting suspicious activity. Automated tools are popular with institutions for that very reason, Donovan pointed out, as it gives the BSA officer, and the regulators the ability to look for certain anomalies. “You can sort through millions of transactions and decide if they are legitimate, or if they need closer inspection,” he explained.
In 2006, the Federal Financial Institutions Examination Council (FFIEC) issued a revised version of the Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual. The manual has been updated to incorporate regulatory changes since the manual was first released in 2005 and to clarify supervisory expectations. Financial institutions need to understand what these changes mean for their regulatory compliance programs. The changes include an enhanced discussion of the risk assessment process which a financial institution uses to identify and develop its overall BSA/AML risk profile, a new section discussing Automated Clearing House (ACH) transactions, and updates for emerging money-laundering risks.
Determining if a candidate possesses the skills necessary to fill an information security position effectively before hiring him/her is not a trivial task. There are many methods one can use to gauge the effectiveness of a candidate's background. It is important to note that for some positions, it might be very difficult to find a perfect candidate (sometimes even finding a single candidate might be quite difficult). Financial institutions should realize that they need to be somewhat flexible, and define some thresholds above that make the hiring process cost-effective. Training less experienced candidates may be a viable option when cost and time to fulfill all requirements is flexible.
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