What is a Bank Secrecy Act (BSA) Officer?

5 mins

What is a BSA Officer?

A Bank Secrecy Act or BSA Officer is a person who works for a bank, credit union, or other financial institution to ensure that the Bank Secrecy Act is followed.

The United States Congress issued the Bank Secrecy Act of 1970, which is also known as the Currency and Foreign Transactions Reporting Act. This Act requires financial institutions and banks to help law enforcement and government agencies to prevent, detect, and fight money laundering and terrorist financing. The Bank Secrecy Act was designed to help detect financial crime by keeping track of monetary movement and other instruments that were transferred from financial institutions in or outside of the US. In order to achieve this, the BSA established certain requirements from financial institutions, national banks, federal branches of foreign banks, and private individuals or entities, such as reporting and record-keeping.

The BSA Act states that individuals, banks, and financial institutions must file financial reports and transactions that exceed $10,000 with the US Department of the Treasury. In addition, they are required to submit any suspicious activity in relation to money laundering or other financial crime. These records help government agencies to keep track of any money laundering activity or financial fraud, during investigations and use it as evidence if an individual is prosecuted.

What does a BSA Officer do?

While the Bank Secrecy Act was originally enacted to aid in criminal tax investigations, its scope has expanded over time to include a major focus on anti-money laundering (AML) rules and procedures, as well as changes to the USA Patriot Act.

A BSA officer’s responsibilities include:

  • To implement and keep in place an effective BSA compliance programme that includes current ongoing practices, guidances, and regulatory requirements
  • To develop, implement, and administer the BSA and other regulatory systems, to ensure that appropriate procedures exist, all of which will help to identify any suspicious activity in relation to money laundering or other financial fraud
  • To have an effective risk-based programme in order to conduct CDD and a monitoring programme, which includes an ongoing analysis of any suspicious activities
  • To monitor the bank accounts of customers who seem suspicious, or are at ‘high-risk’, with relevant record-keeping
  • To file reports or investigate any suspicious activities, such as money transfers of $3,000 or more, cash purchases between $3,000-$10,000, or transactions exceeding $10,000, and report them to the board members
  • To have appropriate procedures for reviewing, reporting, and investigating any SARs processes, with sufficient research and complete documentation
  • Acting as a point of contact for internal/external audits for ongoing BSA compliance and responding to audit concerns; overseeing actions in relation to a lack of compliance
  • Regularly updating/revising BSA/AML compliance regulations
  • Providing BSA training programs and guidance to appropriate personnel, such as directors, senior managers, and employees
  • Keeping BSA compliance by having monitoring and reporting systems, and monitoring and filing SARs on continuing activity
  • Keeping up with the US laws and BSA regulatory changes, and maintaining them; giving regular reports on compliance to board members; amending any changes to the compliance programme, and implementing required changes in order to mitigate any emerging risks

 

How to have a good BSA compliance programme

To have an appropriate BSA compliance programme, financial institutes must have more than policies, procedures, and processes in place. It is important for them to maintain practices that correlate to these policies and procedures, then execute them.

The BSA compliance programme makes sure that the bank follows the following five pillars:

  1. Has an internal control system in order to maintain ongoing compliance
  2. Conducts independent testing
  3. Assigns a BSA Officer, to ensure everyday compliance
  4. Provides ongoing training to appropriate personnel
  5. Performs risk-based procedures in order to conduct ongoing CDD

 

How to appoint a BSA Officer

The federal banks are required to assign a qualified individual for the position of BSA Officer. Their role is to manage all daily activities in relation to the compliance programme and to maintain AML regulatory compliance. The officer must ensure that the bank or financial institute is maintaining compliance in all places that are amended by the US laws and regulations. They should be able to develop, implement, and execute solutions needed for the BSA compliance programme and further report them to the board on a regular basis.

Confidence and authority

The Bank Secrecy Act Officer is elected by the bank’s BOD to comply with the BSA regulations and manage all aspects of the compliance programme. This means that the BSA Officer is required to have certain access, freedom, and seniority, to keep up with his or her responsibilities whilst executing their duties. They are supposed to be given certain authority within the institution, along with the necessary means to administer the compliance programme effectively.

Expertise and skill set

Not only should a BSA Officer be familiar with the Bank Secrecy Act, but also with their organisation’s own anti-money laundering rules. In reality, this includes being familiar with their company’s goods and services, as well as its clients, applicable territorial legislation, and the methodology used to investigate financial crimes.

The BSA Officer should have some degree of BSA-AML compliance training – and renew that training on a regular basis – to retain this level of understanding.

Business support

Under the board’s direction, the BSA Bank Officer should have enough resources, seniority, and authority within the organisation. It is crucial that the senior manager looks at the BSA Officer’s input into certain activities, such as any risk related to expanding into new products, services, customers, locations, any changes in operations, implementation or adjustment of the existing programme, and so forth.

The BSA Bank Officer should be provided with enough team members, all of whom have the expertise to look into mitigating financial risk based on any services or products that the bank provides. There should be operations and systems that regularly monitor, manage, report, and identify any financial activity risks or other money laundering risks.

Why BSA Compliance is Important

Failure to comply with regulatory requirements can be disastrous for institutions. Breaches can lead to enforcement actions including fines, penalties and sanctions. In addition to the monetary losses, including a steep fall in stock prices in the case of a listed company, institutions would lose market reputation, which they took several years to build up.

Therefore, it is important for companies to have proper compliance programmes and manage them effectively. AML compliance officers are indispensable staff for institutions as they help manage compliance programmes and mitigate compliance risk.

In the present times, when technological changes have significantly changed the financial crime landscape, institutions should make use of the services of skilled BSA officers and modern technology solutions. AML compliance software such as Tookitaki Anti-Money Laundering Suite, developed in line with changing criminal behaviour, makes the work of AML compliance officers easier and more secure. Our AML software helps mitigate emerging AML risks and improves the efficiency of compliance staff.

For more information about our AML solutions, speak to one of our experts.

 

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