MINNEAPOLIS -- Community banks and credit unions that use technology as part of their Bank Secrecy Act and anti-money laundering programs are much more confident in their compliance with BSA requirements than those financial institutions that rely on more manual approaches, according to a recent survey conducted by Wolters Kluwer Financial Services.
Eighty-five percent of the survey's 140 respondents who utilize technology report they are confident they are meeting BSA requirements compared to just sixty-seven percent of respondents who don't use technology. Twenty percent of those institutions using technology said their regulators found any BSA violation during their last visit compared to 31% of those institutions not using technology, according to the survey.
Despite these figures, more than half of the survey's respondents, all of which had less than $3 billion in assets, reported that they still do not use technology as part of their BSA and AML programs, Wolters Kluwer found.
"Community banks and credit unions traditionally have been slow to automate their BSA and AML processes due to the perception that money laundering and terrorist financing were concerns only for larger banks," said Raffi Festekjian, CEO of PCi, a part of Wolters Kluwer.
Festekjian said in the last 12 months, regulators have been "aggressive" in BSA enforcement with smaller banks and credit unions and as a result, "we're going to see a larger number of smaller financial institutions beefing up their BSA and AML programs through the use of technology and consulting services."
Wolters Kluwer conducted the survey through an e-mail sent to BSA compliance officers at community banks and credit unions in late July.