Are you in control of your BSA program?
Learn what regulators want to see in custom AML software.
As criminals get smarter and smarter, those on the front-line detecting and preventing their devious behaviors must become more aware of what it takes to identify criminal activity and stay compliant.
With audits and exams come a lot of questions on how you are mitigating the AML risks present in your institution. As a former regulator, here are a few things that I expected to see when evaluating an automated BSA/AML solution:
Set Your Program Up for Success
Every institution has a different baseline of what they consider normal. They also have those “special customers” that have unique needs. Regulators expect an institution to have a process that can assess their customer base as a whole as well as identify those that regularly deviate from your baseline. An out of the box software solution can be problematic in detecting what’s suspicious for your organization. These types of solutions just won’t cut it. AML professionals need flexibility and control in their AML software that will allow specific parameters to be set for their customer base as a whole, as well as custom parameters for certain groups. Having the right system in place will not only help you be successful in your exams, but it will also help reduce false positives resulting in a more efficient program.
Be In Control of Your BSA Program
Make sure that you are in control of your BSA/AML program. The only thing worse than telling a regulator you are using out of the box settings, is telling them that you don’t know how those parameters were calculated or that you have no control over the process (YIKES). Regulators want to see that you and your team understand your customer’s behaviors. Active participation in the calibrating of your settings keeps you in control. That way, when the inevitable questions from the examiners come, you will be equipped to answer the “how” and “why”.
Be Ready to Report
It’s important for you to have a comprehensive view of the controls in place throughout your automated solution so you can you prove to your examiners that you are mitigating risk appropriately. Regulators expect documentation during exams and want full transparency on the settings within your system. Make sure you have complete visibility into your system and are armed with formal documentation and insight.
Remember, one size does not fit all! While that statement is true in most areas of life, it rings especially true when talking about risk management programs. A custom AML software that allows for flexibility and transparency makes your program better and makes your life easier as the one ultimately responsible for AML risk management at your institution. Would you rather put your trust into a black box with back-end parameter settings or have a custom solution with tailored parameters calibrated by your team and industry experts? The decision is yours, but as an examiner I always looked to see that the bank was knowledgeable about the settings and functionality of their automated solution. Just having the software alone is not enough, and default or averaged risk settings are not going to convince your examiner that you have your risk under control.
Take a look at this video to see how our customers optimize the transparency and autonomy of our custom AML software, BAM+.