It’s important you know that your financial monitoring systems are effectively fighting against financial crimes. Learn ways to spot and report suspicious behaviors and how to utilize technology in the fight against crime.
Guidelines for Reporting Suspicious Behaviors
According to the Bank Secrecy Act, known or suspected law violations or suspicious activities must be reported on a Suspicious Activity Report (SAR). SARs help law enforcement investigate potential money laundering or terrorist financing schemes. The forms also help the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) uncover emerging trends and patterns in financial crimes. Both groups can help uncover and stop illegally obtained money from moving through the system.
Importance of Properly Filling Out a Suspicious Activity Report
Financial institutions must fill out SARs in a clear, concise and legible manner, then submit them before the deadline. Include as much information as possible on the name, address, phone number, occupation, title and nature of business for every suspect involved. Include the method or instrument being used to facilitate the transaction, such as a wire transfer or letter of credit, as well as where the money originated, such as a bank account number. Give details on when the suspicious activity occurred, including whether it was one time or many, and specific amounts of transactions. Describe the nature of your financial institution and why the behavior falls outside the norm. Failure to properly do so makes further investigation into potential crimes challenging or impossible.
Examples of Suspicious Activities
Suspicious activities may cover a range of categories. Unusual transactions may occur among businesses, such as a food importer doing business with an auto parts exporter. An account may have excessively large numbers or volumes of wire transfers. Multiple deposits and withdrawals may happen in bursts. Be aware of anything that seems out of the ordinary for your clientele.
Technology for Keeping Current With Trends
Big data and predictive analytics are financial institutions’ strongest weapons against terrorist financing, money laundering and other financial crimes. Computer systems that monitor suspicious activities and screen for potential criminals on control lists are a necessary part of infrastructure. For financial institutions with various geographic locations, it’s especially important that the master data is centrally monitored to manage transactional risks across borders.
Responsibility for Maintaining Technology
In most cases, a financial institution’s CFO is responsible for controlling the funds and, therefore, needs to oversee implementation of appropriate safeguards. However, utilizing predictive analytics requires expertise from various departments, including finance & accounting, and legal and compliance, so that IT can integrate appropriate controls into the organization’s entire system.
Financial institutions need to ensure they update their technology often to continue protecting against the changing risk environment. Optimum opportunities include every time new detection systems are installed, new risks are faced, and new threats are detected.
Ensure that your financial monitoring is sufficient to protect against daily threats. For additional help with securing staff to implement financial monitoring for your institution, get in touch with the financial compliance recruiters at CarterWill Search & Flex today.