2020 Journal of Community Bank Studies

FIRST PLACE: Mississippi State University

done. More requirements and more reporting standards to follow may leave smaller banks with more paperwork than they can handle. Along with the workload, the communication between banks and the government should be addressed. Banks are required to send their reports to the government, but the government does not relay information back to the banks. After receiving the reports, the government should find a way to utilize that information to assist banks. Mr. Stringer and Ms. Menard both agree that banks are the “eyes and ears” of BSA/ AML. They could be better equipped to handle SARs. Part III: Technology, Innovation, and Collaboration The role of technology has dramatically changed the way that community banks operate. Technology can take tasks that would have required multiple employees and taken extended periods of time to complete and reduce this time tremendously. In CNB’s case with BSA and AML compliance, Verafin is the star of the show when it comes to technology. Verafin considers itself “the industry leader in Financial Crime Management solutions,” and their “software is used by nearly 3000 financial institutions” (Verafin.com). Verafin is a comprehensive financial crime management system that uses artificial intelligence (AI) and machine learning, along with user inputs, to improve efficiency. An example of this is when a customer opens a new account, they would fill out information on their intended use of this account. If there are deviations from

these known uses, Verafin will send an alert through the system and the alert will be further investigated. Ms. Menard (CNB’s Compliance Manager) stated that since the bank started using Verafin five years ago, they have been able to reduce the number of alerts per month from about 1,000 to just 300. The reduction of time spent on investigation of false, or low-risk alerts, has allowed the department to prioritize its investigation of suspicious activity. Ms. Menard also stated that it is about finding the “sweet spot” for the system to trigger alerts, where the bank does not have such a wide array of activity which may trigger an alert, but also that the scope is not too narrow where the bank may miss suspicious activity. Ultimately, the more information that is held about customers, the better the system will run for the bank. This is a significant advantage that a community bank has over its larger counterparts in knowing more about its customers.

The role of technology has dramatically changed the way that community banks operate.

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