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Abrigo Data Center AML/CFT BSA Rules and Regulation Financial Crime Fraud Prevention

7 Fraud and AML compliance reports for bank boards and credit unions

Elissa Brewer, CAMS
June 28, 2023
Read Time: 0 min

Share these reports on AML activities to inform directors

Reporting to the board on AML and fraud compliance is an essential obligation. Here are several types of reports that provide vital information.

Get more tips for managing the AML program from this webinar: "Conquering BSA challenges: Best practices for managing a successful AML program"

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Takeaway 1

Board members have a responsibility to maintain a safe and sound financial institution, and they rely on the BSA Officer's reports to help.

Takeaway 2

Tools ideal for board reporting allow you to put the desired metrics into one dashboard that quickly and easily allows access to important information.

Takeaway 3

Recommended reports on AML and fraud metrics for the board include those on high-risk customers and trends on types of fraud and suspicious activity seen.

Why regular reports matter

Board reporting on AML compliance activities

BSA Officers have a lot of responsibilities. They wear many hats, especially in smaller community banks and credit unions. One essential obligation of BSA Officers is reporting to the board of directors.

However, that monthly or quarterly board report often feels like just another task to do on the mile-long to-do list. For new BSA Officers, in particular, figuring out what to put in the report can seem like a daunting task.

When it comes to report development, you may know the regulatory minimum expectations (e.g., tell the board about SAR filings), but other questions you may have are:

  • What else should you include?
  • What is valuable information about your fraud and anti-money laundering/countering the financing of terrorism (AML/CFT) program?
  • Where do you even get the information to share and put it in a format that is easy for busy directors to understand?

Having built BSA, fraud, and risk management programs from the ground up for financial institutions and helped many others as a consultant, I’ve found the most useful reports to provide to board members take into account three principles behind reporting on AML compliance:

  1. The board of directors (or the designated board committee that you may report to each month) has a regulatory responsibility to maintain a safe and sound institution.
  2. Keeping money laundering out of the institution and creating a culture of compliance are part of that responsibility.
  3. They rely on you, the BSA Officer, to provide them with updated information so they can fulfill their responsibilities.

As the FFIEC manual for BSA/AML exams states,

The BSA compliance officer should regularly report the status of ongoing compliance with the BSA to the board of directors and senior management so that they can make informed decisions about existing risk exposure and the overall BSA/AML compliance program.

Examiners are directed to “review reports to the board of directors and senior management regarding the status of ongoing compliance and pertinent BSA-related information.”

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This article describes several reports that provide financial institution boards with vital information about the fraud and AML/CFT program. It is not an exhaustive list, but it gives good ideas on topics to start sharing. Remember that each institution’s risk profile can be different. Reporting should represent the risk-based approach to AML/CFT compliance.

Automation makes it easier

Reporting tools can help comply with AML/CFT

If you have an automated monitoring system like Abrigo’s anti-money laundering software, you should have access to reports that can quickly provide you with updated numbers on a variety of BSA/AML/OFAC and fraud metrics, In addition, some banking intelligence solutions like Abrigo’s Connect provide customizable tables, charts, and other tools perfect for board reporting. Look for the ability to put the desired metrics into one dashboard, so whenever you need the report, it’s a simple matter of logging in and pulling up all the most recent numbers.

Suppose you do not have an automated system to generate data. In that case, I highly recommend building your own spreadsheet or another data-gathering mechanism to keep current numbers on the necessary information for reporting.

Having a template of your board report will allow you to “plug and play” those numbers, charts, and graphs each month. This will save time and reduce the effort needed to get reports ready to go. Presenting the information in the same format each month will also create consistency for your audience, making it easier to review and understand, especially when there are big changes.

Quickly digestible data

AML compliance reports to provide the board

Charts and graphs like the ones below from Abrigo Connect help the board quickly digest data related to your FinCrime staff’s activities and findings. Some AML compliance reports I suggest you include are:

 

SAR report

Suspicious Activity Report metrics should include the number of SARs filed, the type of SARs filed, and the dollar amount reported. Suspect information should never be included unless it is related to insider abuse.Bar graph showing Suspicious Activity Report trends as part of anti-money laundering compliance reporting to the board. Report showing Suspicious Activity Reports by type

CTRs filed

Currency Transaction Report metrics are a great addition to the board report. They provide insight into cash volumes and cash flows at the institution. I recommend a breakdown of CTRs filed each month by branch. You could also share the number of CTR Exempt clients on an annual basis or whenever that value changes or is updated.Chart showing report of CTRs at a financial institutionBar graph of a financial institution's CTRs associated with high-risk accounts can help board members ensure AML compliance oversight.

High-risk customers

It may not be necessary to list every high-risk customer identified at your institution. But it is critical for the board to understand how many customers/members or accounts have been identified by the AML/CFT department as higher risk for money laundering. I would include the number each month. You could include additional information like branch, geographic location, industry, and the breakdown of business vs. personal accounts.Charts showing AML compliance reports on high-risk accounts at a financial institutionLine graph showing transactions of high-risk customers at a fictitious financial institution.

Current status of any audits or examinations

Keep the board apprised of any upcoming audits or examinations. This would also include program optimizations, model validations, or other processes used to keep your BSA/AML programs in check. If you have recently had an audit or examination and there were findings or recommendations, track the status of remediation on those issues.

BSA/AML/CFT/fraud trends

Reporting on trends is a great way to educate a group of people on what is going on in your institution or the industry. Fraud and AML trends are constantly evolving, and your program should be adapting with them. Sharing this information with your board consistently can give the extra push that may be necessary to get support for your program when needed.Bar charts providing reporting on AML compliance at a fictitious financial institution.

System trends

Use your time in front of the board to brag on yourself and your team. Include metrics around the number of alerts/cases/SARs generated, worked, and filed or closed. This type of information shows your program’s effectiveness and efficiency. It also provides justification for more resources when needed.Bar graph reporting on trends in AML compliance efforts

Community outreach and kudos

If you or someone in your department is developing training or content for community outreach education, make sure your board is aware of those efforts. Did a teller save the bank from a significant fraud loss? Share that with the board too. Did a member of your team obtain an AML certification, advancing their own career and bringing more experience and expertise to the institution? Share those types of events as well.

Conclusion

Build your AML/CFT & fraud programs

Your monthly or quarterly communication with the board of directors is a priceless opportunity to build up the BSA/AML/CFT and fraud programs at your institution. Use the opportunity wisely by planning ahead, utilizing resources, and building relationships with the board every chance you get.

Help your team plan for the unexpected with this webinar: "Building a strong future: Succession planning strategies for your AML program."

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About the Author

Elissa Brewer, CAMS

Senior Risk Management Consultant
Elissa Brewer is a Senior Risk Management Consultant with Abrigo in the Advisory Services Group. She has over 20 years’ experience working in the financial institution & software industry. She has worked directly with financial institutions and FinTech’s to incorporate manual and automated solutions into their BSA, AML, and Fraud

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About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

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