Toll Free: 1-800-980-0959Direct: 786-800-9872
BlogCompliance AutomationAML Compliance Automation and SARs filing … risks of manual reviews

AML Compliance Automation and SARs filing … risks of manual reviews

FinWebTech Logo


Written by Don Lee

Securities and Exchange Commission Enforcement Chief Andrew Ceresney said to the broker-dealers community at the  Securities Industry and Financial Markets Association’s 2015 Anti-Money Laundering & Financial Crimes Conference in New York that compliance with the Bank Secrecy Act “is not optional,” and that a BD’s failure to file a required suspicious activity report (SAR) “is, by itself, a basis for enforcement action.”

Many broker dealers are still using paper exception reports and other manual methods of analyzing their data for suspicious activities. There are many instances where suspicious items are missed in the mounds and mounds of manual data. This leaves firms with gaping holes in their AML program and ripe for regulatory action. These firms should look into automated solutions to help reduce noisy results in their exception reports while allowing the compliance departments to devote their attention to areas of higher risk.

Firms with automated solutions need to be careful to ensure they are actively reviewing all of their alerts and closing them out. Ignoring the alerts will lead to failure to supervise or in some cases willful blindness. The pros of having an automated compliance system far outweighs the cons as compliance departments that are not reviewing all of their alerts clearly need work. There are vendors that provide alerts, but not all vendor solutions will provide a work flow to document the reviews. FinWebTech’s automated compliance solution provides a complete case management and work flow system for its transaction monitoring system.

Broker Dealers BEWARE … regulators are on the hunt for firms with AML deficiencies and the fines are not cheap!. The last AML fine from Oppenheimer was a staggering $20 Million cumulatively between all of the regulators. In this day and age, being penny wise and pound foolish when it comes to investing in preventative measures versus paying million dollar fines is a no brainer.

Leave a Reply