For best results, an AML transaction monitoring system should be optimized periodically to avoid excessive false positives and ensure that time is spent on alerts that could potentially be suspicious. “Periodically” is a term frequently seen in the FFIEC Exam Manual and is a risk-based time frame. Generally, your system should be calibrated every 12 to 18 months based on the size and risk profile of your institution, or sooner if your institution has had a significant event, such as new branch(es), acquisition or merger activity, or a change in risk profile. A tuning of parameters using your institution’s customer base to determine outlier activity confirms when you’ve hit that sweet spot.
Additionally, institutions should not cap their alerts to their staffing levels. A 2018 FinCEN civil money penalty was issued against a financial institution for “willfully violating the Bank Secrecy Act.” One of the primary violations uncovered was that “(the bank) chose to manipulate their AML software to cap the number of suspicious activity alerts, rather than increasing staffing to comply with anti-money laundering laws in a timely manner.” This leads to costly repercussions for any financial institution, not to mention the reputational risk encountered with a penalty such as this.
Alerts keep coming. Even when adequately staffed, your alert monitoring system cannot consider the challenges you may face such as sudden staff turnover, staff medical leave, holiday and conference seasons, spikes in activity during tax season, etc. We can help! If you are looking for some relief, Abrigo has CAMS-certified team members who work with you to ensure your BSA program’s health is strong. We can help you review alerts, work cases, write SARs, perform EDD reviews, lookbacks, and more. We bring hands-on experience and industry knowledge to help you succeed. Learn more about the services we offer or contact our experts today.