On December 3rd, The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Financial Crimes Enforcement Network (FinCEN), the National Credit Union Administration and the Office of the Comptroller of the Currency issued a joint statement encouraging new approaches to fight money laundering and terrorism financing.
New approaches, however, may increase regulatory risk depending on how "outside of the box" they are viewed during examinations. A key to developing and implementing defensible new initiatives is a documented approach to clear concepts, expected outcomes and a strong testing and validation process.
Testing and validation of AML controls may be executed through a variety of techniques. Considerations should include:
Above/Below The Line Testing
Parameter Settings Changes
Overlap of Other Models/Tools/Programs
Impacts on Executive Management Decisions
Up-to-Date Documentation of Policies & Procedures
Accessibility of Program Information
Incorporating Program Information Into Training
Private sector innovation, including new ways of using existing tools or adopting new technologies, offer the potential to enhance the efficiency and effectiveness of banks' BSA/AML compliance programs. To assist banks in this effort, the Agencies are committed to continued engagement with the private sector and other interested parties.