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Know Your Customer
Some Advice From Pros
Do small banks need to worry? Yes, says Dennis Algiere, Vice President for Compliance at the Washington Trust Company in Westerly, Rhode Island. Algiere is a former drug agent for the state and knows whereof he speaks. He shared his ideas and experience with the audience at the ABA/ABA Money Laundering Enforcement Seminar.
It only takes one transaction, he pointed out, to be caught. Both the penalty and the adverse publicity can do significant harm to a small bank. What it comes down to, he says, is that the bank should be concerned about who is doing business with the bank.
To make KYC work, the board must be aware of the money laundering problem and aware of the bank's BSA program. In addition, Algiere advises banks that often ignored departments of the bank, such as trust and private banking, and safe deposits, must be included in all aspects of the BSA program.
Regular training is for all bank staff is essential, and particularly for tellers, CSRs, Trust, and safe deposit staff. Effective training should include examples of suspicious activity. The bank's compliance record on SARs usually depends on tellers and clerks in operations. They should be trained to identify, report, and review suspicious activities. But because determining whether activity is actually suspicious is subjective, they should be encouraged to ask for advice. Algiere finds that in his bank, specific examples of suspicious activity help staff to understand the concept.
Steve Harvey, Vice President, Bank of America and Manager of BSA Bankwide Compliance, agrees with Algiere that it is important to make sure that senior management is on board with the program. He points out that the program is expensive and therefore needs senior level support.
Copyright © 1997 Compliance Action. Originally appeared in Compliance Action, Vol. 2, No. 15, 12/97
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