Applying Enhanced Due Diligence to High-Risk Customers

Presented by:
Patricia Cashman

                      Question -- What does an attorney have in common with the convenience store where he buys his gas each week? Or what is the common thread between the local movie theatre and the scrap metal dealer? Answer - They could all be classified as AML high-risk businesses by their financial institutions. That means enhanced due diligence (EDD) procedures must be developed and applied to each of these customers. But where does one start?

Regulators expect financial institutions to have appropriate procedures in place to rate their customers for the level of BSA/AML risk they bring with their banking relationships. That means your institution needs a robust Customer Due Diligence program developed to identify those customers presenting higher levels of risk due to the nature of their business, their clientele, high cash volumes and other factors. For higher-risk customers, the institution needs to have in place appropriate extended due diligence procedures designed to identify potentially suspicious activity that might involve money laundering, terrorist financing or fraud.

This session will assist you in answering these questions:

• How do you identify your FI's high-risk customers?
• What EDD procedures should be applied to a high-risk customer?
• How does an auditor test the effectiveness of the monitoring of the high-risk customer's activities?

You will receive:

• Best practice suggestions to improve your FI's EDD procedures
• Ideas for identifying all high-risk accounts
• Sample worksheets for documenting monitoring procedures and conclusions

Who should attend? This session is designed for:

• New BSA/AML auditors who want to fully understand the why and how of an MSB AML audit;
• Experienced BSA/AML auditors who wants to revise or refresh their work program;
• BSA officers who want to know what the auditors and examiners will be testing and how to properly document for compliance issues;
• BSA officers can use this as a training tool for personnel responsible for MSB monitoring; and
• Risk management personnel

About the Speaker: Patricia Cashman is a partner in Cashman Compliance Solutions, LLC. She is responsible for consumer compliance reviews, Bank Secrecy Act (BSA) and Anti-Money Laundering reviews, and compliance and BSA training.

Patricia began her banking career in 1969. She has been the senior operations officer for three Dallas-Ft. Worth area community banks, an assistant examiner for the Texas Department of Banking and managed the compliance/internal audit division of TIB - The Independent BankersBank, one of the largest bankers' banks in the country.

Additionally, Patricia has spoken as a webcast/teleconference presenter for the American Bankers Association (ABA), BankersOnline (BOL) and the Center for Financial Training (CFT), taught a variety of compliance subjects for the Texas Bankers Association (TBA) and ABA at their respective Compliance Schools. She also serves as a BOL GURU and been a speaker/trainer for numerous banks and compliance organizations.

You have the right under this license agreement for this CD-ROM to use this presentation on a single-workstation. Use on a network is in violation of the copyright agreements. CD may be used by multiple users at a given institution but may not be placed on a network or in any other multi-user environment.

This program was recorded in its entirety in December 2013. The CD-ROM includes program slides, materials (if available) and follow-up Q & A document.