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#1919415 - 05/01/14 06:21 PM Independent BSA exam
sunshinebanker Offline
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Joined: Mar 2006
Posts: 233
We are an OCC regulated bank and sending out requests for proposals for our independent BSA exam. we will be needing both a review of our core bank and prepaid card division. The FFIEC guidelines require transaction testing. If we look at the number of general purpose re-loadable cards we have issued and put that number into the statistical sampling model we use, it requires transaction testing (review of transactions for suspicious activity) of almost 400 cards. Finding a consultant with resources available for this detail of testing along with the cost of paying for this level of transaction testing is becoming an issue.
Are there other banks requiring this level of detail transaction testing by outside exam teams either for their prepaid card accounts or core bank accounts?

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#1919428 - 05/01/14 06:36 PM Re: Independent BSA exam sunshinebanker
ACBbank Offline
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ACBbank
Joined: Jul 2006
Posts: 4,344
New York City
What kind of sampling methodology are you using? The OCC relies on judgmental sampling and 400 samples seems very high.
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"100 victories in 100 battles isnt the most skillful. Subduing the other's military w/o battle is the most skillful." Sun-Tzu

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#1919474 - 05/01/14 07:43 PM Re: Independent BSA exam sunshinebanker
osucpa Offline
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Joined: May 2011
Posts: 1,406
Most exam procedures are risk based. Sample size of 400 is extremely high.

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#1919561 - 05/01/14 10:55 PM Re: Independent BSA exam sunshinebanker
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
it requires transaction testing (review of transactions for suspicious activity) of almost 400 cards.

That is not how you test for suspicious activity in a BSA exam. You never just select a random sample of cards or accounts and then test for suspicious activity.
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#1919662 - 05/02/14 02:20 PM Re: Independent BSA exam rlcarey
sunshinebanker Offline
100 Club
Joined: Mar 2006
Posts: 233
I agree with your comment, "that is not how you test for suspicious activity". What I propose is having the independent firm review our queries/logic of those queries/alerts/investigations and follow through SAR filings instead of the detailed card transactions. In addition, our compliance analyst also conducts BSA/AML transaction reviews during our annual program manager reviews. I would expect the independent examiner to also review a sample of that work for reasonableness. Agreed with my methodology Does that make sense?

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