As 2015 comes to a close, we are pleased to share our most popular articles from the Risk Management Blog in 2015.
1. 4 Red Flags of Money Laundering or Terrorist Financing
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).
2. 5 Key Components of a BSA/AML Compliance Program
You are most likely familiar with the Financial Crimes Enforcement Network (FinCEN) which is a bureau of the Treasury Department. FinCEN’s mission is “to safeguard the financial system from illicit use and combat money laundering and promote national security” through the use of financial services information.
3. The Important Role of Internal Controls for AML Compliance
It is well understood that money launderers use deceit or theft to capture the processes of financial entities for illicit purposes. As a result, your AML compliance program must implement internal control designs that increase the chances of preventing or detecting such activities.
4. [INFOGRAPHIC] Anti-Money Laundering: Safeguarding the Banking System from Financial Crime
Money launderers will go to great lengths to use the normal activities of legitimate banks, credit unions, and money service businesses to help them “clean” ill-gotten gains. This infographic highlights the typical 3-step money laundering cycle and outlines key components of an effective anti-money laundering program.
5. The Essential Role of Internal Audits in Fraud Control
Given the high prevalence of organizational fraud, as reported by the Association of Certified Fraud Examiners (ACFE), companies have strong incentives to invest in fraud auditing capabilities—both internal and independent (external) audits. While both are extremely effective, this article is focused on internal audits.
6. 5 Key Elements of BSA/AML Compliance Training
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.
7. FinCEN’s Alan Cox Foreshadows AML Enforcement Actions in Armored Car Industry Address
Speaking to a gathering of armored car operators, banks, insurers, ATM cash providers, and many others involved in the vital cash-in-transit and cash servicing industries at this year’s SCTA Conference, Cox had a strong call to action for the group: Comply with AML requirements or face significant enforcement actions.
Cox’s speech came exactly one year since FinCEN had issued its guidance related to money transmitters, specifically as it relates to currency transporters, but he noted that the industry appears to still be grappling with some of the rules and guidance.
8. 4 Factors to Measure For Your BSA/AML Risk Profile
Both the Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC) mandate that covered financial entities—and this includes all banking institutions, virtually all money service businesses, and many cash-intensive non-bank businesses—establish an Anti Money Laundering (AML) compliance program.
9. Subject to AML Regulation? Don’t Neglect Third Party Risk Management
One of the hottest—and hardest—topics in BSA/AML compliance is managing the risks due to third parties. Regulatory agencies including FinCEN, OFAC, and others have expanded the definition of “third party” to include any business relationship between a financial entity and another party, except a customer. This includes the subcontractors of your contractors or vendors.
10. Why KYC is the Backbone of BSA/AML Compliance
By their very nature, money launderers will go to great lengths to cover their tracks. In the process, they use the normal activities of legitimate businesses like banks, credit unions, money service businesses, and other financial services organizations to help them “clean” ill-gotten gains. One of the strongest tools financial institutions have in combating the covert use of their services for illegal ends is to Know Your Customer (KYC).
We hope you enjoyed this look back at 2015 and look forward to many more in 2016!