BSA/AML System Calibration

Regulatory complexity and high costs associated with BSA/AML transaction monitoring encourage institutions to improve the effectiveness and efficiency of their automated AML transaction monitoring systems. When properly configured, these systems are designed to help institutions detect and alert on patterns of activity that may indicate money-laundering or terrorist-financing activities. An improperly configured monitoring system may result in:

  • BSA/AML Staff burdened by unwarranted Alerts
  • Money Laundering Transactions going undetected
  • Your Bank's examiners express concern

Failure of calibrating your AML Monitoring System to recognize suspicious transactions may leave your institution vulnerable to criminal activity and regulatory enforcement. Detection scenarios and thresholds should be evaluated and considered to ensure proper transaction monitoring coverage. This should include an analysis of existing risk exposures (e.g., Products & Services, Funds Transfers, Customers & Entities, etc.) in an effort to identify which Risk View Alerts and corresponding parameters require modification and/or tuning.

“Trimming costs by reducing the time and cost per alert of false positives”

The Bank may also consider performing a BSA/AML Monitoring System reconciliation to determine if all currently licensed software functionality has been applied, and whether other unlicensed functionality is available to improve BSA/AML efficiency and effectiveness.