Complying with Bank Secrecy Act (BSA) and anti-money laundering (AML) regulations is a core competency for any bank.
But banks’ business-account customers? Well, it depends on the customer.
Although banks mandate that their business customers implement BSA/AML compliance tools, sometimes those customers — particularly startups and emerging players — are unprepared for the level of engineering and staff resources that it takes to integrate and manage disparate vendors and tools.
In a way, it’s not surprising. Companies are naturally focused on running and growing their business — serving customers, winning new work and keeping an eye on the competition. They’re not BSA/AML compliance specialists.
But here’s the problem: when BSA/AML regulations are violated, the federal government can levy some pretty serious consequences. Last year, the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) handed out more than $1.6 billion in fines for violations of compliance regulations.
Simplifying and strengthening compliance
That’s why a new wave of all-in-one, compliance-focused payments platforms, enabling organizations to deploy a single suite of software to cover their payment operations and compliance needs, is so well-timed.
The best of these new offerings provide customers with full know your customer (KYC) identity verification, transaction monitoring and case management capabilities, integrated with payment operations from day one.
What to look for
At a minimum, organizations should ensure any BSA/AML compliance offering they are assessing provides:
- Embeddable onboarding flows to collect customer information and bank account details, enabling institutions to move money without storing personal information;
- KYC identity verification — including sanctions and adverse media screenings, and advanced device and behavior monitoring — for recognizing fraudulent actors and compliance issues;
- Transaction monitoring to minimize fraud and money laundering and facilitate suspicious activity reporting;
- Case management tools to streamline manual review processes; and
- Risk assessments that combine machine learning with a rules engine.
Advisory role
Which configuration or specific offering to choose is a decision that will be evaluated by individual customers, but the emergence of a new wave of all-in-one platforms for compliance and payment operations is good news. By enabling banking customers to check the BSA/AML “box,” they will be empowered to get on with their real focus — running and growing their business.
Matt Marcus is co-founder and chief product officer of Modern Treasury, and focuses on developing, refining and deploying the company’s new products and services with a shared goal of making customers’ operations seamless, reliable and easy to manage.
