ABA Banking Journal - December 2010 - (Page 44)
compliance clinic | aml/bsa monitoring Finding bad eggs, at the right price Balancing BSA software’s costs and promises by steve cocheo, executive editor U p until recently, Morrill and Janes Bank and Trust found a “manual” approach to Bank Secrecy Act/anti-money laundering monitoring satisfactory for keeping tabs on customer activity. Even when the $580.6 million-assets bank, based in Merriam, Kan., began offering online accounts, Chris Spellman, compliance officer and senior vice-president, believed that, with an extended period of special attention, the existing approach could continue to work. At the outset, Compliance’s standards were quite strict: “If they missed one [factor],” said Spellman, “we weren’t going to open the account.” Adjustments were made over time. But then, aggressive rate setting for the bank’s interest-checking product sent its account to the top of that category on Bankrate.com (in late November, it was still at #2). Online enrollments shot up. “The volume kind of killed us,” says Spellman. “It was either throw people at it or throw technology at it.” Reducing the rate could have chopped volume, but management was pursuing a strategy and so the bank had a gap that needed filling. When “manual” isn’t Spellman spoke of this predicament as part of a panel on efficient use of BSA/AML technology in community banks at the ABA/American Bar Association Money Laundering Enforcement Conference held this fall. There are many automated monitoring solu- tions, some designed chiefly for larger institutions, and some adaptable to banks of multiple sizes. Some are freestanding, others are available from core vendors. But the decision to spend on a vendor solution hinges on multiple factors, one being, what is meant by “manual”? For some, the term conjures images of nearsighted clerks with green-eyeshades poring over stacks of transaction slips. That’s not quite accurate, insofar as the speakers’ banks are concerned. None of the three banks represented on the panel had bought an automated surveillance system, but they were well beyond eyeshades. “When you are talking to examiners and you say you are ‘manual,’ that scares them. They don’t like it,” said co-panelist Elizabeth Snyder, senior vice-president and compliance officer at 44 | AbA bANKiNG JourNAL | December 2010
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