Interagency Regulators Encourage BSA Innovation

The Federal Reserve Board, Federal Deposit Insurance Corporation (FDIC), Financial Crimes Enforcement Network (FinCEN), National Credit Union Administration (NCUA), and Office of the Comptroller of the Currancy (OCC) have issued a joint statement to encourage banks and credit unions to consider, evaluate, and, where appropriate, responsibly implement innovative approaches to meet their Bank Secrecy Act/anti-money laundering (BSA/AML) compliance obligations.

The joint statement does not alter existing BSA/AML legal or regulatory requirements, nor does it establish new supervisory expectations. The agencies will not advocate a particular method or technology for banks to comply with BSA/AML requirements. Banks/credit unions that maintain BSA/AML compliance programs commensurate with their risk profiles, but choose not to pursue innovative approaches, will not be penalized or criticized by the agencies issuing the statement.

Innovative approaches to combat money laundering, terrorist financing, and other illicit financial activity has the potential to augment aspects of credit union’s BSA/AML compliance programs, such as risk identification, transaction monitoring, and suspicious activity reporting. Some banks are becoming increasingly sophisticated in their approaches to identifying suspicious activity, commensurate with their risk profiles. For example, by building or enhancing innovative internal financial intelligence units devoted to identifying complex and strategic illicit finance vulnerabilities and threats. Some banks are also experimenting with artificial intelligence and digital identity technologies applicable to their BSA/AML compliance programs. These innovations and technologies can strengthen BSA/AML compliance approaches, as well as enhance transaction monitoring systems. The agencies welcome these types of innovative approaches to further efforts to protect the financial system against illicit financial activity. In addition, these types of innovative approaches can maximize utilization of banks’ BSA/AML compliance resources.

To read the interagency statement in full click here. Haven’t completed your 2018 BSA training yet? Click here to register your staff and/or volunteers.