When you do your annual BSA risk assessment, how are you getting the numbers on various customer types? Are you pulling reports based on NAICS codes, or special information codes, or something else?

For the higher risk type customers referenced in the manual, we extract reports based on NAICS code. For other types (non-profits, etc), we created a specific user field within our core and add a "Y" if they are a non-profit and extracting that field to a report is quite simple.

Thanks PQ. Are you using the full NAICS code, or the short list of truncated codes that FinCEN wants for CTRs and SARs?

We set up groups in our AML monitoring system for each of the groups in our risk assessment. As new accounts are added, they select the entity type based on full NAICS codes and they are automatically placed into groups as appropriate. We also provide a cheat sheet so that these people make it into the groups we want.

6 digit codes

If their risk assessment tracks the methodology examiners are supposed to use, banks identify the "customers subject to expanded examination overview" at account inception and use their MIS and risk ratings to track members of each group:

Individuals
* Non resident aliens and foreign individuals
* Politically exposed persons

Entities
* Embassy, foreign consulates, and foreign missions
* Nonbank financial institutions
* Professional service providers
* Nongovernmental organizations and charities
* Business entities, domestic & foreign
* Cash intensive businesses

There is no "regulator approved" list of higher risk customers, but the list above is a very good place to start shopping for them; e.g. knowing the number of cash intensive customers you have and the percentage of them you have classified as "higher risk" would be prudent.

Individuals do not have NAICS codes. Using only the NAICS codes that are permissible on the CTR and SAR limits their value. (You don't have to dumb the list down just because FinCEN did.) NAICS codes do not convey any information regarding the level of money laundering risk that a specific customer might represent; e.g. one cash intensive restaurant may be "high" risk and another "low" risk.

I am working on our risk assessment and we have included many industries in the professional service provider category that I don't believe are appropriate. I'm fairly new to the bank and I want to get this cleaned up.

Can someone share the NAICS codes they are including for their PSPs?

541110
541211
541219
523920
523991

Thank you!!!!

FYI all I did was google "professional intermediary NAICS codes" when I gathered those codes for a report.

We have a user code in our core that we have always used (A-X, yes I have 24 higher risk types). However due to moving to a new core within the next 12 months we will have to move to NAICS only.

In addition, the OCC found "room for improvement" in my coding due to the fact that 70% of my higher risk types are either Cash Intensive Businesses, Professional Service Providers or Non-Governmental Org/Charities - each of which has a letter code. They said we had to break those three down into separate categories and speak to each individually in our risk assessment. SO....we have gone through thousands of customers and added or corrected NAICS codes on those three. For instance - Cash intensive=liquor stores, retail stores, vending machine companies, convenience stores, etc. Professional Service Providers = attorneys, accountants, investment brokers, etc. and so on.....

Hope this helps.

Here are some others:

531210 Real Estate Brokers
523140 Commodity Brokers
541191 Title Abstract & Settlement Offices

Would be interested to hear what others are including.