Why preparation isn’t just a checkbox
If you’ve been through an exam recently, you know how quickly things can shift from manageable to overwhelming. The first day letter alone can feel like a firehose of documentation requests. However, those who prepare proactively by maintaining current risk assessments, conducting staffing assessments, and documenting clearly and thoroughly position themselves to not only survive an exam but also use it as a meaningful touchpoint with regulators.
Getting ready starts well before that first day letter arrives. Most exam teams give about 2–4 weeks’ notice, but institutions that treat exam prep like a continuous process are more confident when it’s go time.
Three steps to stronger BSA/AML and fraud exam readiness
- Streamline your foundation by starting with the basics:
- Are your AML/CFT and sanctions risk assessments up to date?
- Do you have a fraud risk assessment?
- Can your team demonstrate timely resolution of alerts, sanctions matches, and SAR filings?
- Are your policies and procedures current, consistent, and centralized?
- Do your procedures match actual day-to-day processes?
Even more importantly, do you have the documentation to show all of this? Regulators increasingly expect decisions and alert dispositions to be well-supported. Every case note should read like an examiner might see it, because they will.
Technology plays a significant role here, too. Transaction monitoring software must be optimized based on your institution's risk. Too many, or too few, alerts will draw criticism. Dashboards and automated reports can help reduce the manual scramble when exam or board reporting time hits.
- Turn findings into leadership insights
One of the most significant opportunities after an exam is translating technical findings into operational value. When compliance leaders frame issues around the level of risk and impact rather than regulatory language, they engage executives and boards more effectively.
An example of achieving value from a finding may look like this:
- Exam finding: Greater than 30-day backlog in alert review
- Compliance insight: Insufficient staff to keep pace with alert volume
- Leadership takeaway: Time to reassess staffing or enhance monitoring systems
Create a post-exam action plan that clearly defines ownership, timelines, and how progress will be tracked. Following up regularly and tying each item to business impact not only builds accountability but also shows your institution is serious about continuous improvement. Be sure to meet all deadlines in your plan to show commitment to improvements.
- Communicate clearly with the board
Boards don’t want technical jargon or data dumps. What they need is a high-level understanding of how the institution is managing risk and where strategic investments may be required. A graph or chart as a one-look understanding of the data will go a long way.
A few statistics to highlight include:
- Trends in SAR activity by typology, both AML and fraud
- Alert resolution timelines and backlogs
- Progress since the last exam, and how findings have been addressed
- Risk scoring changes linked to customer behavior or product risk
Use visual dashboards or heatmaps to make key points stand out. And always connect metrics to the institution’s strategic risk appetite. That’s what turns compliance from a cost center into a strategic advantage.
