There have been developments on the BSA/AML front in the last year, and a lot more will come down the pipe in 2023 and beyond. Your Board of Directors needs to be kept in the loop as they are ultimately responsible for your institution’s BSA/AML compliance program. Effective training for your Board of Directors is the key!
While your Board of Directors doesn’t need to know every nitty, gritty detail, they need to have a general understanding of the potential BSA/AML risks your institution faces and what you are doing to mitigate them. The first step is policies and procedures.
Kevin explains more in the video.
My advice is typically to keep your policies lean and mean, to keep them articulating the board's position. I go into many financial institutions, and their policies get into a lot of granularity as far as what exactly they want people to be doing, which is okay, but keep in mind, a policy requires board action to update. Now, a procedure doesn't necessarily need that. So that way, your program can be a little bit more nimble. If there's a required change, maybe your BSA officer identifies an area of risk and realizes we need to change these procedures quickly. Then they don't have to go to the board of directors to get some of that minutia tweaked over time.
So generally, I would like to advise you to keep your policies very short and to the point, with clear direction from the board regarding the expectations. And then, in your procedures, that's where you lay out specifically what types of things you're going to be looking for. And we'll get into that in a little more detail. And then processes, that's the next step down. But the procedure still should be presented to the board for approval periodically, but it doesn't require board action to change every single little detail.
Published
2022/11/09