Knowledge & Insights: Frequently Asked Questions
Q & A with Bob Sottile, Senior Director
- BSA/AML Practice
Q. How do institutions know that their BSA/AML program meets legal, regulatory and industry requirements?
A. Too often, companies don't know until the regulators come in and they are cited for violations. At that point, it is too late. Pre-examination review of BSA/AML procedures (also known as mock exams) is the most effective way to ensure that your program is compliant.
The key to a successful mock exam is to use independent and objective expertise with previous regulatory experience.
Q. How do we know if our AML program is cost effective?
A. Benchmarking against organizations who have implemented compliance programs is the best way to determine the cost effectiveness of your program. Our breadth of consulting expertise provides benchmarking of your program against others in the industry.
Q. How do you determine how well your AML program is working?
A. The best way is through a periodic review of business practices by conducting random IT/Systems audits and an independent review of AML programs including Customer Identification Program (CIP), Know Your Customer (KYC) and transaction reviews.
If you have a question, email Bob for an answer!
Q & A with Loren Grant, M2 Consultant
Q. What are the key factors for institutions complying with the Regulatory Requirements of Loan Applications?
A. All institutions must comply with C.I.P. requirements as well as verification of Financial Statements of Applicants. The Loan Processing & Sales Teams are required to collect the information as well as verify that the information is accurate.
M² has trained consultants that can assist lending institutions with implementing effective Risk Ranking Matrices and Audit Reviews.
Q. What are key areas that my institution should review when dealing with Foreign Banks?
A. One of the key factors to maintain compliance depends on the types of accounts held and transactions conducted by the foreign banks. If the institution has transactional accounts ("Due-To Accounts"), they are then required to maintain a concurrent US PAC Certification and have BSA/AML Procedures that adhere to policies governed by US Regulators.
M² has experience in reviewing and implementing procedures to insure that your institution meets these requirements. Establishing a regular review for this area's compliance is key to staying out of the regulatory cross hairs.
Q. How do we best prepare for an NASD/SEC AML Audit?
A. Establishing regular reviews of your New Account Documents and your clients' monthly statements are the best way to document your compliance with the Know Your Customer Rules and to monitor for AML issues. Depending on your company's growth, you may need to conduct such reviews on a monthly or quarterly basis.
Some of our consultants are previous NASD Examiners and can assist your firm with preparing for and conducting mock exams which assist you in identifying areas that need to be addressed prior to the actual audit.
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