Recent impacts of COVID-19 have accelerated a digital movement and remote working model for some elements of the bank secrecy act (‘BSA’)/anti-money laundering (‘AML’) and sanctions compliance program that were likely already in motion. Despite the global impact of COVID-19, the Financial Crimes Enforcement Network ‘FinCen’ expects financial institutions to continue following a risk-based approach, and diligently adhere to their BSA obligations.
In the context of the current pandemic, financial institutions are expected to face significant challenges due to: (i) a convergence of (probable) increased criminal activity and fraudulent schemes seeking to capitalize on the pandemic; and (ii) the strains of a remote workforce, a decrease in staffing capacity, and level of timely communication required to run an effective BSA/AML and compliance programs (i.e., a stale AML Business Continuity Plan,’BCP’).
Similar to the financial crisis of 2008, the current pandemic is likely to see additional elements of fraud in many areas of the financial services industry – desperate families, investors, and lenders demanding their money back only to find it vanished before COVID-19 appeared.
This article highlights certain components of a BSA/ AML and sanctions compliance program, which have been accelerated in response to COVID-19, articulates associated risks, and suggests potential solutions to maintain program effectiveness.
To read our POV on Managing a Remote BSA/AML Compliance Program, click here.