Current & potential developments

The recent shelter-in-place and work from home requirements have led to a dramatic spike in online activity, both personal and business-related. In particular, increased online/mobile banking activity exposes consumers and businesses to the risk of financial crimes. FinCEN has released a notice on April 3, 2020*, which provides information to assist financial institutions in complying with the BSA obligations as a result of the COVID -19 pandemic. Financial Institutions are still instructed to continue following a risk-based approach and continue to adhere to other BSA obligations.

*
https://www.fincen.gov/news/news-releases/financial-crimes-enforcement-network-provides-further-information-financial

Impact

In response to the greater online banking activity, there may be many banks that rush to deploy their suite of online services, potentially resulting in compromised due diligence and risk assessment of such services.

Reductions in staff and other personnel challenges from the impact of the COVID-19 for banks further present problems with keeping up the normal processes of CTR filings, SAR filings, and other transactional monitoring activities.

The combination of the current COVID-19 crisis and the unusual circumstances the country is under may create other financial crime risk factors unique to each institution based on its operations and client base.

Key questions you should consider

  • What controls does your institution have in place if staff become affected by the COVID -19, such as a back-up point of contact to handle day-to-day compliance operations?
  • What are the heightened risks of client privacy and confidential information for your institution?
  • What is your comfort level with your institution’s rules and scenarios for various AML tests and transaction monitoring under the current circumstance?
  • Are your policies and procedures regarding AML adequate across a wide range of online products and services and/or the onboarding of new client types?

How Accume can help

A comprehensive BSA/AML program risk assessment, especially for new or modified products and services, will help identify all risk exposures as well as the need for added risk controls and mitigation, as may be appropriate.

Engagement of 3rd-party professionals may help to ensure a fresh perspective supplementing internal experience within your institution in identifying special risk factors and proper controls to ensure all Compliance and BSA obligations are met.

The key components of a program risk assessment should minimally include a critical review of the following:

  • Compliance Program Framework
  • Customer Risk Profile
  • Suspicious Activity Monitoring Parameters
  • Risk Issues Formulation

Potential backlogs and Lookback reviews for alerts, screening and /or SAR reviews should also be updated.

Certain tuning and calibration of case sampling as well as adjustments to procedures to better adapt to heightened risk factors posed by the COVID-19 crisis may prove useful.