The Bank Secrecy Act (BSA) aims to prevent money laundering and other financial crimes, and its compliance program is built upon five core pillars.
Here are the 5 pillars of a Bank Secrecy Act (BSA) compliance program:
| Pillar | Description |
|---|---|
| 1. Compliance Officer | Designate a compliance officer: A qualified individual is responsible for overseeing and managing the BSA/AML program. This person ensures the program's effectiveness and adherence to regulatory requirements. |
| 2. Internal Controls | Develop internal controls: Implementing policies, procedures, and processes designed to detect and prevent suspicious activity. These controls should cover all aspects of the financial institution's operations and address specific risks. |
| 3. Training Program | Establish an AML compliance training program: Providing comprehensive and ongoing training to all relevant employees. This training ensures staff understands their responsibilities and how to identify and report suspicious activity. |
| 4. Independent Audit | Have independent audits of the program done: Regularly assessing the effectiveness of the BSA/AML program through independent audits. These audits identify weaknesses and ensure the program is functioning as intended. |
| 5. Customer Due Diligence (CDD) | Perform customer due diligence: Identifying and verifying the identity of customers and understanding the nature and purpose of their relationship with the financial institution. Ongoing monitoring helps detect suspicious transactions and unusual activity. |
These five pillars work together to create a robust BSA/AML compliance program, helping financial institutions detect and prevent money laundering and other financial crimes.
