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#2188650 - 08/09/18 09:19 PM Risk Assessment Statistics
chuckchuck Offline
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Joined: Apr 2018
Posts: 45
We have a new staff member in our BSA department and she is stating that at her old bank in their Risk Assessment, they did all kinds of charts/graphs, whatever to state SAR filing reasons, and then break it out further "% nationally filing for this region"..."in our state % filing for this reason" and it goes on and on.
Question: is this needed? is it necessary?
as far as I know, the actual risk assessment guidance itself is vague in FFIEC, so I am curious if others place any stock in graphs or data such as this. Does it help your bank to know if other banks in your state are also filing a bunch of "suspicious inquiry" SARs? I don't think so, but I could be wrong.

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#2188652 - 08/09/18 09:28 PM Re: Risk Assessment Statistics chuckchuck
rlcarey Offline
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Galveston, TX
It probably came from the philosophy of the more your risk assessment weighs, the better the examiners think it is - or hope they just give it a pass after a quick thumb-thru. I am not sure what national stats have to do with an individual bank's risk profile.
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#2188654 - 08/09/18 09:34 PM Re: Risk Assessment Statistics chuckchuck
Daisy Doodle Offline
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Joined: Feb 2014
Posts: 1,030
Southern U.S.
We do not have charts and graphs, but we have a fair amount of statistics. I kind of like having them there, because it reacquaints me annually with our bank and trends in our various parts of the risk assessment. That's when I usually learn we removed a non-local ATM, for example. Plus, we BSA types are a little nerdy.

We do not include any comparisons to other banks in our risk assessment.

I do include such comparative info in our annual board presentation when those reports are released periodically. There we have charts and graphs!

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#2188659 - 08/09/18 09:46 PM Re: Risk Assessment Statistics chuckchuck
EB, CAMS Offline
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Joined: Mar 2009
Posts: 133
flyover country
I agree with Daisy Doodle. We have statistics and quantitative data in our risk assessment. The graphs and charts and comparison data is in the board report. They like pretty pictures. smile
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#2188700 - 08/10/18 02:54 PM Re: Risk Assessment Statistics chuckchuck
LiveFunLife Offline
Member
Joined: Dec 2017
Posts: 91
I am currently trying to figure out what types of pretty pictures and statistics to include in board reports. Any pointers on what makes board and executives go "ahh"

Edit* Ahh in a good way
Last edited by LiveFunLife; 08/10/18 02:55 PM.
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#2188708 - 08/10/18 03:04 PM Re: Risk Assessment Statistics chuckchuck
Daisy Doodle Offline
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Joined: Feb 2014
Posts: 1,030
Southern U.S.
Lol. The board is busy and deluged with info. I am usually allowed about 15 minutes for my presentation, so I believe in KISS when it comes to the charts and graphs personally. I do not agonize over it. I present operational basics, hot topics, and upcoming new projects. Simple graphics could appear in any or all sections, if I think it jazzes things up a bit.

Last year I did a slide on Human Trafficking and included a graphic that illustrated that the big majority of human trafficking was labor trafficking as opposed to sex trafficking. That brings it much closer to home for our bank.

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#2188835 - 08/13/18 12:58 PM Re: Risk Assessment Statistics chuckchuck
ACBbank Offline
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ACBbank
Joined: Jul 2006
Posts: 4,236
New York City
If you have statistics you have the data points to make charts. You're not required to do so, but if done properly they make the document look professional. Sometimes a well written/designed document will lead to less scrutiny.
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#2188839 - 08/13/18 01:22 PM Re: Risk Assessment Statistics chuckchuck
rlcarey Offline
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Joined: Jul 2001
Posts: 80,325
Galveston, TX
I have nothing against charts and graphs. I am still at a loss though as to what the % of SARs filed for a specific reason when comparing an individual bank to State or National trends might assist with in one's risk assessment. If Nationally, 25% of SAR are filed for structuring and 33% at the State level and the bank is filing only 10% for that reason, I guess it might tip off the regulators that you aren't doing a very good job of identifying structuring? Are you then going to go into a long narrative in your risk assessment as to why there is such a discrepancy between the bank and National and State trends. I am unsure as to how that is related to assessing an individual bank's actual risks? Risks are based on the individual bank's products, geographic location and customer demographics - peer group comparisons, unless you have identified an actual peer group based on those factors, are apples and oranges comparisons.

Charts and graphs of this sort are great for board presentations to give them high level overviews of the industry status of BSA/AML compliance, etc.
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#2188887 - 08/13/18 05:13 PM Re: Risk Assessment Statistics chuckchuck
ColoradoAML Offline
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Joined: Mar 2018
Posts: 305
Our risk assessment doesn't only assess AML and CTF risk to the bank through customers/products/geography, but also risk to the bank through BSA compliance, which includes trends for SARs, CTRs, emergency watchlists, etc. The assessment is for the bank, not examiners, and all of this information helps the Board/everyone determine how many resources are required and how they should be allocated.

I tend to agree with rlcarey that the RA author should be careful with SAR filing stats, using that data badly seems like it could easily draw criticism. Just because there are trends doesn't mean that you should follow them. I don't think the data is totally irrelevant though; if, for instance, you saw a year-over-year increase in a specific type of suspicious activity within your area and it's something your program hadn't focused resources on identifying, that may be a good reason to reassess. Whether that all belongs in the risk assessment is up to you though. I have a lot of SAR stats, trends and predictions in our RA, but not this data.

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#2188896 - 08/13/18 05:40 PM Re: Risk Assessment Statistics chuckchuck
BrianC Online
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BrianC
Joined: Nov 2004
Posts: 6,427
Illinois
SARs are a lot like speeding tickets. Everyone assumes there is a quota for the number that should be issued in a given timeframe, but that may not reflect the number of suspicious customers at your bank or the number of bad drivers in your town.
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#2188938 - 08/13/18 08:50 PM Re: Risk Assessment Statistics chuckchuck
HappyGilmore Offline
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Posts: 19,602
Pulling people out of the ditc...
i hate pretty much any "peer comparison" as if somehow the competition is doing such and such suddenly it makes it right for your bank to be doing it? but a peer comparison on SAR filings? oh dear...

Quote:
If Nationally, 25% of SAR are filed for structuring and 33% at the State level and the bank is filing only 10% for that reason, I guess it might tip off the regulators that you aren't doing a very good job of identifying structuring?


this did make me laugh...
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