By David Lutz, Manager BSA/AML and Stephen Panattieri, Staff Auditor BSA/AML
Ongoing BSA/AML training is one of the main pillars of a safe and sound BSA/AML compliance program. Knowledgeable staff, especially in areas with heightened exposure to money laundering (i.e., Tellers, CSRs, Branch Managers) can have a significantly positive impact on the Bank’s BSA/AML compliance program. The ability to identify red flags and knowing when to escalate potentially suspicious activity can make a huge difference in combating money laundering and terrorist financing. Therefore, all employees must retain a basic knowledge of BSA/AML and OFAC requirements. So what are some banks doing to ensure that their employees are knowledgeable of BSA/AML and OFAC regulations?
Training New Employees
Banks should pay close attention to new employees and make sure they receive a sufficient amount of training before working independently. This is an area where a Bank could be at risk of non-compliance if the employee fails to comply with regulatory requirements. Most banks have new hire orientations and/or training programs that will require a new employee to participate in or complete a curriculum of training courses, typically within 30 to 60 days from the day the individual was hired. This process ensures that the individual receives a sufficient amount of training and retains the knowledge needed to comply with the BSA. Special attention should be paid to those employees without any prior banking experience, as they may struggle with understanding the concepts and risks associated with their position. A face-to-face orientation with the BSA Officer or Compliance Officer with a post training assessment would certainly benefit both the employee and the Bank.
Training of Existing Employees
Here is where the programs of banks may vary. Depending on the number of employees and resources available to them, banks may choose to perform in-house (face-to-face) training, use an online training service provider, or a combination of both. By utilizing the online training software, banks have the luxury of tracking the training status of each employee and can assign various job-specific training courses tailored to the functions of each employee. In-house training is also beneficial as it is more interactive, allowing participants to ask questions and gain more insight as to how regulations apply to their institutions. Regardless of the type of training, banks should ensure that they cover all elements of BSA/AML and OFAC requirements.
BSA Department External Training
The heightened expectations of BSA/AML compliance and the increased stringency of regulatory examinations have made it imperative for individuals responsible for overseeing BSA/AML programs to participate in some form of external training. The benefit of external training sessions, whether they are BSA/AML conferences, webinars, or periodic committee meetings, is that individuals gain insight on regulatory hot topics. More often than not, BSA conferences will have several representatives from the various regulatory agencies talk about what is trending in the AML industry and what may be necessary for banks to meet regulatory expectations. Individuals responsible for BSA/AML compliance should also consider obtaining some form of advanced certification (e.g., CAMS, CRCM) as this will strengthen their knowledge base and appeal to the regulators.
Board of Director Training
According to FFIEC guidelines, “the Board of Directors and senior management should be informed of changes and new developments in the BSA, its implementing regulations and directives, and the federal banking agencies’ regulations.” Without an understanding of BSA/AML subject matter, the Board of Directors cannot effectively provide BSA/AML oversight. It is important that the Board receives periodic training, at least annually. Similar to training provided for employees, Board training can be provided via in-house sessions which, in most cases, will be during a Board meeting. Emphasis should be placed on the risks and ramifications of non-compliance.
BSA/AML is a heightened area of risk to all banks and, therefore, it is important for employees to gain further knowledge of BSA/AML subject matter and the consequences of non-compliance. There are many resources available that will assist in establishing an effective and ongoing BSA/AML compliance program.
Senior Manager - BSA/AML
avid Lutz is an experienced Audit Supervisor at the Firm for the specialized area of Bank Secrecy Act/AML Compliance reviews. He is a Certified Anti-Money Laundering Specialist