Federal financial regulators, along with the Treasury’s Financial Crimes Enforcement Network (FinCEN), have issued a statement on risk-focused Bank Secrecy Act/Anti-Money Laundering (BSA/AML) supervision. The statement does not include any new requirements but is intended to improve transparency into the risk-focused approach used for planning and performing BSA/AML examinations.

BSA/AML compliance programs should be risk-based and designed to identify and report potential money laundering, terrorist financing, and other illicit financial activity.

Federal regulators conduct risk-focused BSA/AML examinations and tailor examination plans and procedures based on the risk profile of each institution.

Common practices for assessing a risk profile include:

• Leveraging available information, including the bank’s BSA/AML risk assessment, independent testing or audits, analyses and conclusions from previous examinations, and other information available through the off-site monitoring process or a request letter to the institution;

• Contacting financial institutions between examinations or prior to finalizing the scope of an examination, and
• Considering the institution’s ability to identify, measure, monitor and control risks.

The information gained assists examiners in scoping and planning the examination and initially evaluating the adequacy of the BSA/AML compliance program. Regulators generally allocate more resources to higher-risk areas, and fewer resources to lower-risk areas.

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