By SHAUN HARMS Principal, and VISHAL SHAH, Director, Forvis Mazars Regulators around the world have been ramping up their investigative efforts into how some of the world’s major banks are handling financial crime risks. What’s striking isn’t just the institutions involved. It’s also the signals that these regulatory efforts are sending regarding the direction of anti-financial crime (AFC) compliance expectations. Financial institutions should heed these signals and prepare for heightened scrutiny of the anti-financial crime programs, including their Bank Secrecy Act (BSA), anti-money laundering (AML), combating the financing of terrorism (CFT) and sanctions compliance programs. Regulatory concerns aren’t just about failures in transaction monitoring or delays in filing suspicious activity reports. Regulators are taking a more thorough approach and asking banking and other financial institutions to consider deeper, foundational questions: Did you really know your customer (KYC)? Did you appropriately act on red flags? Was your governance strong enough to challenge high-risk business decisions in a timely and effective manner? This article will explore regulatory developments, changes in the banking compliance landscape and strategies to consider. RECENT REGULATORY TRENDS AND FINDINGS Some recent investigative efforts have included scrutinizing financial activities with allegations of evasive practices and potentially illicit activities, leading investigators to examine whether these practices led to wide-scale fraud and Anti-Financial Crime Investigations Signal Future of Bank Compliance 19 WEST VIRGINIA BANKER
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