The decorations are put away, holiday time with friends and family was enjoyed, and another year in the banking business is well underway. Where will you spend your compliance time and dollars this year? Regardless of the number of regulations and changes in the regulatory world, one area should be firmly entrenched in every institution’s compliance resource plan every year, and that’s the Bank Secrecy Act (BSA) and related Anti-Money Laundering (AML) laws.
In addition to establishing a system to identify customers with whom an institution conducts business, an acceptable BSA/AML program has several other required components or pillars: a system of internal controls to ensure ongoing compliance, a designated individual to coordinate and monitor day-to-day BSA compliance, an independent test or audit of the institution’s program, and personnel training. To keep this article at a reasonable length, we’re going to focus on the training pillar.
It can be argued that BSA/AML training is the most critical pillar, since an institution’s successful BSA/AML compliance is dependent on its personnel knowing and remembering what to watch for, how to react to what they see, and how the activity should be reported and documented. For those who deal with customers day in and day out, learning and understanding the concepts necessary to spot questionable activity and to be skeptical when needed should be second nature. But what’s the best way to do this?
Many financial institutions enjoy the convenience and reach of online training services, mostly in the form of individual modules devoted to specific subjects. In the case of BSA/AML, this could include customer identification, security, suspicious activity reporting, and monitoring high-risk customers, to name a few. Individual modules should be assigned with applicability in mind; for example, tellers need training on anything related to cash transactions, so specific training on completing CTRs for large cash transactions and monitoring for suspicious customer cash handling behavior should be among the assigned education for this group.
Lenders and personal bankers, on the other hand, likely don’t need to understand the specifics of how to complete a CTR, but they do need training on required CIP documentation for new customers, as well as suspicious behaviors to watch for related to loan and account handling activities, just to name two important topics for these groups of employees.
Do board members need BSA/AML training as well? You bet they do! Do they need to know the specifics of completing a CTR? No, but as leaders with ultimate program accountability, board members do need to understand and approve their institution’s policies, resource needs, and BSA/AML risk. They need to stay informed of changes and new developments and the ramifications of noncompliance. As a result, board training should be comprehensive, yet high level enough for this group to see the big picture. While online modules can also be used with this group, nothing can take the place of in-person presentations by an institution’s BSA officer, where program specifics can be shared and questions asked and answered.
In addition to assigned online training modules and scheduled in-person instruction provided by an institution’s BSA officer, other training methods can include participating in BSA/AML webinars conducted by industry experts, reading Internet newsfeeds, blogs, and articles, and even studying consent orders and law enforcement cases related to institutions that violate BSA/AML laws. The latter is very effective at illustrating how any size institution can be involved in illegal activities. Using real-world examples of criminal activity can drive home just how important BSA/AML knowledge is and how costly mistakes can be to an organization. FinCEN’s interactive Web link, SAR Activity Reviews: By the Numbers and Trends, Tips & Issues, is a good source for samples of law enforcement cases, and it categorizes the types of criminal activity covered.
Finally, as the individual who keeps everyone else on the right path, the BSA officer is equally in need of training. While online resources related to BSA/AML requirements abound, regulatory examination report comments suggest an expectation that those in this role should receive outside training every year to keep knowledge and skills up to date. Is your BSA officer provided this opportunity every year? If this is not in your budget and staff training plan, it should be.
The FFIEC Examination Manual requires that employee training incorporate current developments and changes to the BSA/AML regulations. With thoughtful planning and consideration of the variety of resources available to help, no institution should have trouble establishing and maintaining an acceptable―no, a fantastic―BSA/AML training program!