ACAMS: FinCEN Addresses Importance of BSA Data, Technology and Innovation in AML

April 19, 2018

At this month’s ACAMS, regulators once again had the opportunity to start the conference and set the tone for the three-day event. After a brief introduction, Kenneth Blanco, the newly appointed director of the Financial Crimes Enforcement Network (FinCEN), addressed the importance of BSA information to the U.S. Treasury Department and other enforcement agencies in the fight against financial crimes.

According to Blanco, the thousands of BSA records filed by financial institutions every year are available to nearly 500 federal, state and local enforcement bodies along with regulatory agencies. More than 35,000 active users, 149 SAR review teams, 55 task forces led by IRS criminal investigations and 94 other task forces representing all federal judicial districts have access to the BSA data. Law enforcement users and FinCEN analysts have queried BSA data more than 10 million times over the past five years in their fight against terrorism.

BSA data is also vital for tax evasion and money laundering investigations. The IRS Criminal investigation unit inquires the BSA database over 126,000 times a year. Nearly 24 percent of its investigations are initiated from BSA reports.

SAR and CTR reports are also vital to law enforcement investigations. More than 21 percent of FBI investigations use BSA data. For investigations related to organized crime, that number jumps to nearly 60 percent.

Blanco added that international terrorism cases contain BSA data nearly 20 percent of the time. He also said that FinCEN receives almost 1,900 SARS related to terrorist financing each year. These do not include the SARs that were filed for other reasons but may have a link to terrorist financing.

To add to the message about the importance of reporting, Blanco noted that out of the 97 recent domestic terrorism cases reviewed by FinCEN, more than 25 percent had BSA reporting prior to the person’s arrest.

“Simply put, BSA information: 1) provides leads; 2) helps expand cases and puts together pieces of the puzzle or networks we would not otherwise see; and 3) helps alert us to trends and criminal activity or illicit activities so that we can get ahead of the harm, deter it hopefully or prevent the harm from spreading.”

A point that Blanco emphasized further was that even if data does not assist with a specific case, it does not mean it is any less valuable. The U.S. Treasury Department regularly works with BSA data to connect networks, understand trends and topologies and to develop red flags. This data becomes even more powerful and contextual when combined with open source and law enforcement data, and helps to connect shadowy networks that they would not be able to otherwise see.

The final topic of Blanco’s address centered on outreach and technology, both of which are FinCEN’s priorities. Regulators and institutions need to have the tools so they can shift from being reactive to proactive. This means collecting the right information and using machine learning and artificial intelligence  to fully exploit the data in order to get a picture of risks and better predict and prevent illicit activities.

“At FinCEN we applaud and encourage these new ideas and innovation. As I mentioned, incorporating innovation into the BSA framework is a key priority for me at FinCEN and we are committed to being more forward-leaning in this regard.”

To view Kenneth Blanco’s full address at the conference, visit the ACAMS site.

 

About Anu Sood:

Anu Sood is the Director of Product and Corporate Marketing at CaseWare Analytics and is responsible for the company’s global marketing strategy. Prior to CaseWare Analytics, Anu worked in various roles in the high-tech industry and her accomplishments range from writing software for telephone switches to launching a new global satellite communication service. Anu has extensive experience in strategic marketing, corporate communications, demand generation, content marketing, product management, product marketing and technology development. 

Connect:    Anu Sood 

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