A Bank Secrecy Act (BSA) Compliance Officer coordinates and maintains compliance with Bank Secrecy Act regulatory requirements to detect and prevent money laundering. This senior-level bank role spends most of its time examining data and ensuring that different rules and procedures are successfully implemented. These tasks may come under the authority of the Bank Compliance Officer in smaller financial institutions, while bigger financial institutions frequently create a specific BSA compliance position.
What Is the Role of a BSA Officer?
BSA Officers are in charge of overseeing all areas of their institution's BSA compliance program. They design, install and organize AML systems and controls. They must notify state and federal authorities in the case of suspicious behavior or financial crimes.
The BSA/AML Officer is required to keep the Board of Directors and senior management informed on the following on a regular basis:
- Status of corrective actions made in response to detected compliance issues
- Training status, including subjects and attendance
- Customers that pose a high risk
- Trends in Currency Transaction Report (CTR) filings
- Exempt customer trends
- SAR submissions
- The number of notifications generated by the automated surveillance monitoring system of the bank
- Cases formed as a result of an alert generated by the automated surveillance monitoring system.
The BSA Officer's responsibilities include the following:
- Administration, maintenance, coordination, and monitoring of the Bank's day-to-day compliance with BSA/AML/OFAC/CDD/EDD/KYC/FinCEN/USA Patriot Act and associated laws, regulations, policies, programs, initiatives, rules, and reporting requirements.
- Responsible for overseeing, administering, and improving all parts of the BSA/AML/OFAC monitoring systems, including ensuring that suitable parameters for detecting suspicious behavior are in place. System reporting and automatic account monitoring software are both part of monitoring systems. Knowledge of Verafin is an advantage.
- Ensure that all required regulatory reporting is done in a timely, accurate, complete, and compliant manner, including, but not limited to, timely and properly completed Suspicious Activity Reports (SARs) and Currency Transaction Reports (CTRs) to FinCEN, as well as FinCEN 314(a) and 314(b) procedures and reporting.
- Maintain an efficient CDD/EDD risk rating and monitoring procedure, which includes initial and continuing evaluations, as well as examination and analysis of unusual/suspicious account behavior.
- Act as a liaison for State and Federal exams, as well as internal and external independent audits of the Bank's BSA/AML/OFAC compliance procedures; respond to exam and audit findings, and manage remedial action for any relevant compliance flaws or breaches.
- Maintaining and upgrading BSA/AML/OFAC policies and procedures, as well as getting approval from the Bank's Board of Directors.
- Conduct BSA/AML/OFAC risk assessments on an annual or as-needed basis, taking into account goods, services, customers, and regions that may pose BSA/AML/OFAC-related risk, and collect and report on an annual basis.
- Performing various additional responsibilities as assigned.
How to Choose the Right BSA Officer for Your Institution
Banks are more vulnerable to negative consequences such as criminal charges, loss of customer trust, damaged image, potential job loss, and substantial fines that might be ruinous to smaller institutions if they do not have a high-quality BSA officer on staff. That is why it is vital to have the correct individual on your team to ensure that your financial institution's activities adhere to the Bank Secrecy Act.
Here are some things to look for if you find yourself with an empty BSA officer position.
Understanding of AML Compliance
It's one thing to grasp BSA compliance on the surface, but your BSA officer must have a thorough awareness of the legislation and procedures and be able to speak to how they've implemented them in past roles. Before employing a BSA officer, you may wish to evaluate potential applicants' awareness of recent additions to the Bank Secrecy Act.
For example, let’s say new BSA/Anti-Money Laundering updates were given. Prior to taking on the post, your future BSA officer should be aware of these revisions and be ready to discuss how they've assessed risk in terms of money laundering and how they might apply it to your institution.
With real-world examples from previous employment, your ideal applicant should demonstrate their ability to self-start and introduce new tactics into your financial organization. Outstanding applicants may even come to the table with more concrete examples of how they want to integrate into your organization. You can acquire insight on how they will respond to changes in the future based on how they respond to these inquisitions.
As the business has evolved, banks have become more aware of the techniques used by fraudsters to circumvent normal security measures. But, just as banks evolve, so can scammers. Criminals are always devising new and inventive ways to perpetrate fraud.
Attention to detail will be required for a BSA officer to implement a system properly.
For example, a BSA officer should keep an eye out for any questionable conduct, such as cash purchases of negotiable instruments and transactions exceeding $10,000
Ideally, your BSA officer should be meticulous when reviewing BSA requirements and have a strong interest in the abilities required to accomplish the job properly.
Enthusiasm for the Position
The longevity of any employee, not only BSA officers, is crucial to the sustainability of any financial organization. A person who is passionate about what they do assures that they are in it for the long haul. It's simple to weed out individuals who are simply "searching for a day job."
While it may be difficult to find someone who is really enthusiastic about BSA compliance, BSA officers should be enthusiastic about justice and protecting individuals from fraud. Before hiring, obtain a sense of what motivates people to become BSA officers.
Ask about the various types of training they've had in the past, as well as the kind of training they'd want to get in the future.
Ideal Training for BSA Officers
Here are some examples of specialized forms of training that are ideal for BSA officers:
- AML/BSA Certification – The course covers recommended practices and should be a baseline course they have already attended.
- AML/BSA Training -- This course should be attended on an annual basis since it is vital in their development and comprehension of current Bank Secrecy Act updates as well as AML compliance.
Ultimately, your BSA officer should come to the table with suggestions for the most efficient and effective ways to avoid fraud.