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#1866282 - 10/29/13 09:26 PM Examiner Requiring Check Feed in AML System?
Rangers Fan Offline
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We have an examiner requesting that our AML software be capable of pulling in check debit data from our core but this system is designed to pull in all other transactional data (ACH, cash, wire, electronic, ATM, RDC, etc.) and provide reports based on velocity, patterns, volume, etc. The core systems provide the images of the checks themselves which is what I have always been interested in (who was the check written to? Who signed it? Where whas it deposited?). I am not seeing any basis for a "checks only" review in the FFIEC exam manual dedicated to check debits only and have veiwed them only in the context of they will often be in the mix of other debit/credit patterns of layering/integration and will of course be a tool used in forms of ML but kiting and other issues will be picked up in other reports, not the just the AML system. Am I missing something?

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#1866301 - 10/29/13 10:13 PM Re: Examiner Requiring Check Feed in AML System? Rangers Fan
rlcarey Offline
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Examiner or auditor and what is their basis for the recommendation besides personal opinion? What specific risk is he saying that by doing this, it will mitigate? After all, the use of AML software and the setting of its parameters is based on identified risks. You don't develop parameters just to go on witch hunts.
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#1866308 - 10/29/13 10:32 PM Re: Examiner Requiring Check Feed in AML System? rlcarey
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Examiner. We already have processes in place to review check debits that are very thorough and just making sure I hadn't taken a longer nap than I should have and missed something. I will follow up on the "why" with them tomorrow, eagerly awaiting a really good answer but apparently this was a previous recommendation for previous managemnet and it has not been implemented and this is the rub.

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#1866310 - 10/29/13 10:36 PM Re: Examiner Requiring Check Feed in AML System? Rangers Fan
rlcarey Offline
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Galveston, TX
Recommendation or in the report? If a solely a recommendation, as I cannot believe anything like this would make the report, it should and probably will stay as such. If they insist, then I would respond that you will continue to take the recommendation under advisement. Then 86 it as soon as they turn their backs. It is a ridiculous recommendation and shows their lack of understanding of the AML process and is more a poor reflection on them than of your bank.
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#1866314 - 10/29/13 10:48 PM Re: Examiner Requiring Check Feed in AML System? Rangers Fan
Kathleen O. Blanchard Offline

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They may just be used to seeing it. I frequently see systems include check activity, with alerts for variations. In that case, you have to get through why it is covered elsewhere in your process and has no negative effect on the quality of your system.

If prior management agreed to do this, they made your job now harder.
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#1866319 - 10/30/13 12:27 AM Re: Examiner Requiring Check Feed in AML System? Rangers Fan
edAudit Offline
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You are here
If there is no check data how are you going to be held responsponsible to catch madoff when the sec who audits their books cant eek
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#1866710 - 10/30/13 06:59 PM Re: Examiner Requiring Check Feed in AML System? edAudit
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Refer back to the original post- check acivity is reviewed, just not in the AML system. Madoff also didn't use only check activity in his fraud-there was also wire transfer activity which would have been picked up in the account analysis.

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#1867036 - 10/31/13 03:28 PM Re: Examiner Requiring Check Feed in AML System? Rangers Fan
AnnRoy Offline
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South
What AML system are you using? Feel free to PM if you wish to respond in that manner.
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#1867259 - 10/31/13 07:12 PM Re: Examiner Requiring Check Feed in AML System? Rangers Fan
Dolly Nugent Offline
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Southern California
Please keep us posted. I suspect we are using the same AML product. Interested to know what your examiner is thinking.
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