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Wire Transfer Via On-Line Banking

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I have been told that the employees in charge of on-line banking are considering allowing wire transfers through our new on-line banking product. What kind of compliance and security issues should they consider when they are designing this product? We are new to on-line banking so my feeling is that we should learn to crawl before we run. Some of the bigger banks do not have this on-line banking feature. How does our midsize bank think they have the resources and the knowledge to accomplish this?

There are some great products available that allow banks to offer a variety of services on-line, however it might still involve a manual process at some point. Here are some ideas surrounding security and regulatory requirements when conducting a wire through an on-line channel:

  • Ensure your institution has strong CIP procedures, especially if you are opening accounts on-line. Make sure you are comfortable with the identity of the customer before conducting wires.
  • Make sure the initial on-line sign-in process is strong and will not allow generic passwords (e.g. customers name)
  • Make sure all wires are filtered through OFAC software
  • Have some type of account monitoring tool in place to help identify suspicious activity (e.g. unusually large dollar amounts, high risk locations, frequency of wires)
  • Contact the customer or require a signed form for all wires over a certain dollar level (e.g. $25,000)
  • Send a confirmation letter to the customer’s address after each wire transaction

First published on 1/17/05

First published on 01/17/2005

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