Our compliance team (CU Works Compliance) was kind enough to put together this article for our blog readership after attending the 2018 BSA Coalition meeting last June. Part of our outsourced compliance services are monthly newsletter updates, where our compliance team analyzes new information and summarizes what is going on in the compliance world - so you don't have to!
Below is a sample of what our compliance clients enjoy every month. Interested? Contact us at firstname.lastname@example.org to learn more about monthly compliance alerts.
Top 10 takeaways from the BSA Coalition meeting include:
1. The BSA Coalition is a COMMUNITY, not an industry. Financial institutions, law enforcement, and regulators all have to work together to create compliance programs on the leading edge of managing and anticipating ever-changing AML risks.
2. The technology challenges and opportunities of a BSA program include artificial intelligence and human intelligence. Artificial intelligence is the theory and development of computer systems able to perform tasks normally requiring human intelligence. There will always be a need for human eyes throughout the process. It is important to hire people who understand the technology you want to use.
3. We learned there is an “I” in team. Cases are worked by individuals on task force not by the task force itself. The individuals at the credit union responsible for filing the SAR and the individuals working the SAR make the team.
4. FinCEN loves 314(b) sharing. They believe that collaboration is the key. If your credit union comes into contact with another institution that is not willing to cooperate, document that fact. FinCEN looks at trends and if need be, they will apply pressure on financial institutions to share information. If you are not registered to share information at this time, your credit union should consider doing so.
5. Law enforcement sees it as a red flag if an institution does not file any SARs. Their thought is what are you missing or hiding?
6. People who write SAR narratives are the gatekeepers of the information that law enforcement relies on. Remember, they do not know what you don’t tell them. Do not ASSUME anything. SAR narratives should gain the attention of the reader. Begin by telling why you think the activity is suspicious and continue by bringing the individual to life by including transaction analysis, supporting documentation, and identifying all players and account numbers.
7. One of the biggest findings during a BSA exam is the fact that credit unions have policies, procedures, and processes but they are not following them.
8. SARs are CONFIDENTIAL. You may think this is a no-brainer, but it was stressed by more than one speaker.
9. Credit unions are not performing transaction testing to gauge usefulness and correctness of the software they are using to monitor for BSA. Instead, they are relying on factory defaults. The software should be in place to assist humans in their efforts. Again, it is important to hire people who understand the software you want to use.
10. Believe it or not, BSA is not the #1 priority of law enforcement; cybersecurity is. However, SARs are important in identifying and preventing cyber security. FinCEN Advisory, FIN-2016-A005, is a great resource in understanding BSA obligations regarding cyber-events.
We hope you enjoyed this sample article from our compliance team. Let us know what you would like to see in the future. If you have any questions, feel free to contact Alicia at email@example.com