Since 1970, Congress has taken a number of actions to impede criminal money laundering, all of which fall under the Bank Secrecy Act (BSA).
Among other things, anti-money laundering (AML) laws call for conventional banks, credit unions, securities dealers, money services companies and other financial institutions, to carry out money laundering checks and to keep precise records that could indicate money laundering.
Continuous BSA/AML training is among the most fundamental pillars of a secure BSA/AML compliance program. Well-informed personnel, particularly in areas with increased exposure to money laundering can have a considerable positive influence on the Bank’s BSA/AML compliance program. The ability to recognize red flags and understanding when to elevate possibly suspicious activity can make a tremendous difference in fighting money laundering and terrorist funding.
Simply put, all workers of relevant institutions must maintain a basic understanding of BSA/AML requirements.
Getting new employees up to speed
A BSL/AML compliance program should ensure new employees get ample training before being allowed to work on their own. Your company could be at risk of non-compliance if any worker fails to comply with regulations, and new employees are particularly vulnerable to non-compliance errors. Most BSA/AML programs include an onboarding program that has new workers take a number of training courses, normally within 30 to 60 days from the hire date. This ensures the individual gets a good amount of training and keeps the knowledge required to comply. Particular attention ought to be paid to those staff members without prior banking experience, as they may have a problem with the concepts and risks associated with their position.
Types of on-going training
In addition to training new hires, a BSA/AML program should also include on-going training for all staff member affected by compliance laws.
Based on the number of staff members and resources available, your organization may hold in-house training sessions, make use of an online training service, or use a combination. Companies using an online training program can track the training of each worker and assign job-specific courses related to the duties of each worker. In-house training is more interactive, allowing the trainee to ask questions and gain more specific, granular insight.
Risk assessment
Various financial institutions have different risk profiles, and each organization in a category can differ from the others in the same category. Government agencies recognize this and as such, do not call for a one-size-fits-all compliance program. However, each institution must have a compliance program that suits its risk profile.
Risk assessment is a vital starting point in establishing a compliance program. Institutions should cautiously find out the risks built into their company, investigating products and services, customers, and geographic factors. Then, these risk categories ought to be assessed for risk, with the sum of risks yielding the organization’s risk profile.
A fundamental principle of risk management is the use of independent, third-party audits. For AML compliance, a review every 12 to 18 months is the suggested best practice. This ought to be a risk-based audit that is attentive to the company’s specific risk profile.
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