Financial Crimes

BSA/AML/OFAC examinations, especially at institutions where significant issues were noticed in prior internal Audit or regulatory examination, may become very intense and expose the institution to serious regulatory risks, if regulators deem the remediations to be ineffective at mitigating BSA/AML/OFAC risks for the institution. RGS helps institutions prepare for upcoming regulatory examination of this crucial function. Our members bring years of experience working with institutions and the regulatory examination process. We understand regulatory expectations, as well as industry standards and the complexities associated with BSA/AML/OFAC compliance associated with institution’s business profile. The mock examinations of RGS are designed to identify potential issues ahead of time, enabling the Financial Institution’s management to implement necessary remedial actions and reduce the number of potential examination findings or severe supervisory actions.

RGS team provides experience, insights, and best practices to help establish or enhance the financial crimes functions surrounding BSA/AML, sanction compliance and fraud prevention. Our mission is to help establish effective and time-saving processes while optimizing the utilization of resources. RGS’s seasoned specialists also evaluate the systems, reporting functions and quality of the data tracking methodologies being used. We are mindful of costs and therefore provide effective and efficient solutions.

We perform, evaluate, and update BSA/AML/OFAC risk assessments (BSA/OFAC-RA). An evaluation or update of the BSA/OFAC-RA is performed by RGS’s seasoned BSA/AML professionals. Our assessment ensures that the core compliance elements including new regulations, advisories and guidance are properly addressed both qualitatively and quantitatively. In addition, we determine that all key risks associated with products, services, geographies, and customer base have been determined and appropriately rated, and that mitigating controls are documented appropriately, resulting in appropriate determination of residual risks for the institution. If required, we also separately suggest process enhancements that can improve the quality of controls and reduce the risks further.

We develop and update the BSA/AML and OFAC programs of the financial institutions, enhancing their policies and procedures, facilitating the implementation of efficient and effective risk-based comprehensive BSA/AML and OFAC programs across the institution. RGS team is familiar with customizing programs that suit and support an institution’s needs based on the size and complexity of the business. We also focus on enhancing policies and procedures to ensure the accurate alignment with regulatory requirements and capture the key controls and procedures being performed.

BSA/AML Training is one of the key pillars of an effective AML Program of the financial institution. We offer training programs that are designed not only to address core Board training requirements but also includes industry developments and best practices. We create staff training programs tailored to specified needs. Our training programs also include specialized areas such as BSA/AML, financial crimes, sanctions, trade based money laundering, geographic risks, lessons learnt from public supervisory actions, and new and evolving risks.

RGS performs comprehensive AML system validations that also examine model risk management governance policy, controls, and related practices. We focus on areas for process and internal control improvement that would strengthen reporting including AML alert results, potential suspicious activity identification and related KPIs. We understand the challenges presented by high rates of false positive alerts and seek opportunities through the assessment of rules and parameters to improve alert outcomes. Our comprehensive validations cover all applicable areas, including model governance, data input validations, output validations, above and below the line analysis, alerts and case management, etc.

Our senior team of AML specialists are experienced at performing AML lookbacks and collaborating with the bank management, regulatory authorities, legal counsel, and all stakeholders to derive the most cost-effective approach to addressing lookback requirements, identifying activities that require in-depth investigations and any resultant BSA reporting related to suspicious activity or currency transaction. We also undertake customer due diligence reviews to address any issues embedded in the customer AML risk rating process and perform in-depth reassessments of the customer risk ratings.

We undertake fraud and forensic investigations. Apart for validating details of the fraud and the extent of misappropriations, RGS analyzes in-depth the control design or operating effectiveness failures that resulted in the fraud and related AML/OFAC risks, if applicable. We assist in determining practical and cost-effective ways to strengthen anti-fraud measures and controls that will prevent future occurrences of fraud.

Independent Testing of BSA/AML/OFAC compliance is not only a key ‘third line of defense’ activity, but it also represents one of the crucial pillars of BSA/AML program. A strong effective independent testing can identify issues requiring management’s attention before the next regulatory examination, thereby mitigating regulatory risks. RGS deploys team of experienced and seasoned professionals to perform independent testing, supported by subject matter experts with specialized knowledge, ensuring comprehensive risk-based audit, detailed testing and string documentation that enables the regulatory examiners leverage off the audit work, minimizing their testing and concluding on the appropriateness of the testing work and related quality. Our independent testing covers all applicable operational, compliance, and technology areas, and validates corrective actions on prior audit and regulatory examination issues, tests for compliance with applicable regulations, and evaluates the strength of BSA/OFAC function and the effectiveness of internal controls and processes.

RGS specializes in helping institutions ensure that corrective actions implemented to address audit or regulatory examination issues are appropriate and fully addresses the issues and their root-cause. The RGS validation process is thorough, well documented, and clear in demonstrating whether an issue has been properly remediated. Our team is experienced in working with the institution’s management and board, as well as regulatory authorities. Our work ensures a comprehensive evaluation and clear conclusion whether regulatory matters requiring attention, or consent order actions are fully remediated, with a clear understanding of the root cause, and the remediations set the stage for regulatory acceptance of the comprehensiveness and adequacy of corrective actions, setting the stage for removal of the supervisory action and lifting of restrictions on business, if any.

We have in-depth AML and sanctions screening expertise and have assisted many institutions by performing alert and case reviews, whether to catch-up a backlog, address quality issues, perform a lookback, or manage their workload due to staff shortages. Our approach also evaluates causes such as possible system and process issues so that these can be appropriately addressed going forward, ensuring an efficient investigation process related to AML and sanctions risk management.

An effective quality assurance review function, within the BSA/AML/OFAC area, enables self-evaluation of the tasks performed by various units/staff of the BSA/AML/OFAC area, identifying weaknesses and opportunities for improvement. This results in minimizing findings in future internal audit and regulatory examination. An effective quality assurance review also enhances the strength of the BSA/AML/OFAC compliance and related governance at the institution. RGS team performs these reviews at institutions or helps support their internal efforts in the matter. RGS approach is founded upon using professionals with appropriate technical expertise and ongoing co-ordination with stakeholders. Our mission goes beyond basic compliance and seeks to bring insights and best practices, enhancing the BSA/AML/OFAC compliance effectiveness at the institution.

RGS provides staffing to support BSA/AML/OFAC function to resolve short term resource needs. Our available resources augment needs from core alert/cases review skills to specialized in-depth expertise in managing any aspect of BSA/AML/OFAC compliance within the institution, including due diligence reviews, model risk management, customer AML risk rating, periodic customer due diligence reviews, complex investigations, BSA reporting (SARs, CTRs, CMIRs, FBARs), training, Board reporting, etc. RGS resources are assigned based on the specialized skillset or knowledge required. We also provide experienced resources and subject matter experts for BSA/AML/OFAC internal audits.

RGS can assist you in the evaluation of AML and Sanction screening system options taking to account your risk profile as well as the future business and growth plans. Our experience in dealing with many different BSA/AML and sanction screening systems allows us to provide valuable insights as to functionality and systems that may be the best fit for your needs and risk profile.

Timely identification of issues in the pre-implementation phase can save on costly remediations after the implementation. RGS can collaborate with users performing tests, or perform the testing for you, regarding validating system functionalities, integrity, outcomes, expectations, and performance in accordance with proposed design and specifications.

While user acceptance tests of AML and sanction screening systems are expected to be designed to identify issues allowing for their timely remediation, the pre-implementation reviews provide independent validation of accuracy and appropriateness of the implementation process, and identification of any issues that need to be addressed for optimal results. While following FFIEC guidelines, RGS’s subject matter experts partner with management and users in ensuring appropriateness of project management and implementation, as well as testing for identifying any system, data or control issues. Our pre-implementation testing can save on costly remediations after the implementation.

The post-implementation reviews of the AML and sanction screening systems performed by RGS in accordance with FFIEC guidelines ensure that the implementation was done appropriately in line with the project plan. Our work, performed by subject matter experts, ensure that the entire life cycle of implementation was handled appropriately and the implementation does not result in data integrity, control or MIS issues that may expose the institution to risks. Throughout our testing and review, we assist in resolving issues that may have occurred while ensuring that supporting information and documentation of the post implementation review is thorough and detailed.

RGS has expertise to address your needs regarding other support required for BSA/AML/OFAC compliance and provides various consultancy services to support client needs. Some of these, e.g., User Acceptance Testing and pre- and post-implementation reviews are described in detail below. Please contact us for your specific needs.