Like every other important function in a financial entity, a BSA/AML compliance program cannot be expected to operate on autopilot. Managers and employees have to be aware of their responsibilities in the compliance program, and contribute actively as needed. Appropriate training is necessary to transform a compliance program design into an effective on-going operation.

The content and depth of training protocols will vary depending on the size, type, complexity, and risk profile of the organization. However, the Bank Secrecy Act and related laws require that covered organizations have the ability to implement business-specific anti-money laundering programs to help enforce the laws. Broadly speaking, the training program that will enable the organization to do this has five elements.

1. The Board of Directors and Senior Management have to maintain oversight.

As part of a “culture of compliance,” top managers have to be fully informed about the policy issues involved in BSA regulations and authorize the resources needed to comply. They should periodically monitor and evaluate the compliance program based on a risk adjusted evaluation (audit) as well as reports on internal controls. Ultimately, the organizational risk due to money laundering needs to be fully understood at this level, both with respect to the consequences of the crime as well as of non-compliance. … Continue reading

Anti-Money Laundering (AML) regulations for financial institutions—including most cash-handling businesses like armored car services—are risk-based. That is, the regulations recognize that the tremendous variation in the regulated businesses requires an approach that adjusts based on the risks a business actually faces.

Thus, the first step toward compliance with BSA/AML requirements is to perform an assessment of risk to produce a risk profile of the business. The risk profile will form the basis for a compliance program that will be subject to review by regulators and may be exposed to enforcement actions, so it is critical to get it right.

The risk assessment is conducted in two steps: (1) identify the specific risk categories for a business, and (2) evaluate these risks as they pertain to BSA/AML.
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One of the most important aspects of BSA/AML compliance is the responsibility it places on regulated financial entities to report suspicious transactions. This responsibility requires an organization to be able to monitor and identify transactions, evaluate them in real time, and flag the ones that are suspicious. In many cases, a Suspicious Activity Report (SAR) should be filed with the Financial Crimes Enforcement Network (FinCEN).

Financial organizations need to build AML compliance systems that assist trained employees to flag suspicious transactions as efficiently as possible. Internal controls and procedures should have the means to recognize clues that a transaction is potentially illegal, and ensure that employees know it. There are a number of factors these controls would monitor, mostly concerning a customer’s behavior. … Continue reading