Financial Crime World

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Banking Regulatory Compliance: A Checklist for Financial Institutions

As financial institutions, banks must navigate a complex web of regulations to prevent financial crimes, ensure customer trust, and maintain compliance with ever-changing laws. To help guide banking professionals, we’ve compiled a comprehensive checklist outlining key areas of focus.

Annual Testing and Program Assessment

  • Conduct annual testing and program assessment to ensure AML/CTF compliance
    • Independent third-party testing or bank staff with no responsibility for establishing or managing the program
    • Testers must have sufficient knowledge and experience in AML compliance

Customer Due Diligence (CDD) and Identity Verification

  • Conduct CDD for purposes of identity verification, including:
    • Name
    • Address
    • Date of birth
    • Identification number
    • Beneficial ownership information
    • Nature of business
  • Identify higher-risk customers and apply appropriate responses, such as enhanced due diligence measures

Politically Exposed Person (PEP) Status

  • Determine whether customers are PEPs and apply appropriate measures, including EDD
  • Conduct PEP screening at onboarding and throughout the business relationship

Sanctions Screening

  • Ensure compliance with sanctions screening processes, including:
    • Watchlists from the U.S. Office of Foreign Assets Control (OFAC)
    • Other national and international lists

Transaction Monitoring

  • Identify unusual and suspicious transactions indicative of money laundering, terrorist financing, and other financial crimes
  • Assess historical and current transactions, as well as customer information

Suspicious Activity Reporting

  • Have policies, processes, and procedures in place for completing, filing, and retaining SARs and supporting documentation
  • Share SAR information as necessary and permissible by law

Documentation

  • Write down all AML compliance program policies, procedures, and processes
    • Approve by the board of directors and note in board minutes

Cybersecurity and Financial Record-Keeping Laws and Regulations

  • Comply with:
    • Gramm-Leach Bliley Act (Reg P)
    • Sarbanes-Oxley Act (SOX)
    • Payment Card Industry Data Security Standard (PCI DSS)
    • 23 NYCRR 500
    • EU-General Data Protection Regulation (GDPR)
    • Other U.S. Federal laws

U.S. Federal Laws Applicable to Banks

  • Comply with:
    • Americans with Disabilities Act (ADA)
    • Bank Service Company Act
    • Community Reinvestment Act
    • Consumer Financial Protection Act
    • CARES Act
    • Credit Card Accountability Responsibility and Disclosure Act
    • Dodd-Frank Wall Street Reform and Consumer Protection Act
    • And more

In today’s fast-paced financial landscape, regulatory compliance is more crucial than ever. A comprehensive checklist like this can serve as a valuable tool for navigating complex regulations and ensuring program adequacy.