AML Model Validation

Has anyone that has Fiserv's AML Manager been asked by an examiner for a model validation in accordance with the OCC Bulletin 2011-12, gotten said model validation? if so, can you recommend a company/accounting firm that does this kind of third party model validation?

We are not OCC regulated, however, we do use AML Manager and did receive a recommendation to get it validated. We did use a 3rd party vendor to validate the program. Feel free to PM me and we can discuss further. I am not sure that we are supposed to really recommend or discuss specific vendors or service providers in the threads.

We don't use AML manager but we did go through an AML model validation earlier this year. Crowe Horwath did it. 3 weeks with 4 auditors on site. Ran us about $80K.

bhazzard I sent you a PM for more information.

Is Model Validation a requirement??

Regulators are expecting it

http://occ.treas.gov/news-issuances/bulletins/2011/bulletin-2011-12a.pdf

It's not required as long as the regulators don't find anything wrong with your system. I've heard of regulators requiring a model validation when they find issues during their BSA/AML reviews.

In my region, they are pushing more and more for some sort of model validation whether there are problems or not.

^^This.

As an OCC bank, the examiners expect model validation from us on a periodic basis.

It is a requirement... ever since the first BSA/AML Exam Manual in 2005, one of the testing requirements within the Suspicious Activity Reporting section states that examiners/auditors should ensure the Bank has performed an independent validation (independently verified) if they utilize an automated AML system. So examiners are just now getting around to enforcing it.

ADV removed

Randy,

Are regulators requiring the model validation to be conducted annually or when deemed necessary (ex - core conversion or other significant event)?

Not necessarily annually, but you better have one and have it updated based on perceived risk.

What % is the validation cost compared to the annual cost of your AML software? Are we expected to spend as much validating the software as it costs each year? Using the phrase "periodically" I believe the examiners mean at least once between exams or when you add products.

We are expected to have model validation on a variety of programs. This would include AML software and any automated loan underwriting program being used. They do not expect us to validate annually but on a periodic basis (risk based approach).

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