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How can you be sure that your BSA AML program is sufficient for the size and complexity of your institution? That's a daunting question, but one of the best tools to evaluate your program is already in your toolbox; it's your independent review. Now, this is one of the pillars of your program, and you've been getting independent reviews for a lot of years now. However, there's some new guidance that came out that is really helpful. The new BSA AML exam manual update that came out in April 2020 has a lot of details on what your independent review should be doing. It's being evaluated to make sure that your system is correcting itself. Now, some of the rules, it starts off with making sure that your independent review is actually independent. Remember, this is another set of eyes that's coming in completely outside of your program to take a look and see if there's any weak spots or if there's anything that needs to be tweaked.
It also has some rules about the qualifications and competence of the person conducting this review, how frequent should it be done? But the very helpful a portion of this new manual is the minimum requirements of your independent review. You can actually use it as a checklist to go through your review and see if you're missing any point. Things like, does your review have an overall evaluation of your program as a whole? Is it looking at your risk assessment in depth and going through and identifying if there's any areas that you're missing or maybe you're not conducting the risk assessment thoroughly enough? Is there appropriate transaction testing? Are corrective actions being acknowledged and reviewed to make sure that they're appropriate? Are they looking at your training program to make sure that it's appropriate for all of the people? There's a lot of people working together here and are they getting trained appropriately for their position?
Is it looking at your SAR monitoring and reporting systems and your management information systems and having an evaluation of all three? And then also, is the management response appropriate? When there's an issue identified, how is management responding to the issue? Are they taking corrective actions? And then finally, the term, the money laundering, terrorist financing risk component, is your program evaluating that specifically? And then finally, there are some helpful tools to go through and look, are you documenting all of your testing appropriately and has the appropriate followup occurred? Again, fortunately, this is an open book test, so you can go right to the materials and go through and evaluate your independent review to see if it is doing what it's supposed to be doing, and that is making sure your program is appropriate for your bank.
