2020 Journal of Community Bank Studies

2020 COMMUNITY BANK CASE STUDY COMPETITION

and process of how to perform these regulatory activities is necessary to ensure proper compliance. Senior management at CNB also stated that requirements for Customer Identification Programs (CIP) are very broad, and better descriptions of the information needed would be beneficial. One area needing improvement is the documentation required for individuals to open accounts and be entered into the CIP. Different banks may require different information from customers. Some require a birth certificate or passport, while others want Social Security Card or other types of national IDs and driving licenses. This lack of consistency between institutions allows individuals to open various accounts with different banks, and thus creates a higher risk for cleaning cash by depositing multiple small amounts into these accounts. Modernization of BSA and AML Financial technology (FinTech) has advanced significantly over the recent years. One major area Senior Management at CNB spoke extensively about is electronic payments platforms. Platforms like Venmo and CashApp allow individuals to pay other individuals and transfer money seamlessly. Once a user of these systems uploads their banking information, they are free to use this money as they choose with a significant loss of tracking potential criminal activity. Banks that these accounts are connected to have no monitoring system for these transactions, as they do if a transfer or deposit was completed using the bank’s website or through another federally regulated

Citizens National Bank has taken extensive measures to meet, and exceed, regulations set by the Financial Crimes Enforcement Network (FinCEN) concerning the Bank Secrecy Act and the Anti-Money Laundering Act.

(FinCEN) concerning the Bank Secrecy Act and the Anti-Money Laundering Act. These measures include extensive employee training, costly systems for customer identification, and creating vital relationships that directly improve their ability to comply. Despite these measures, CNB rigorously works to continue meeting BSA and AML requirements as technology improves and regulations increase. Senior Management at CNB believes that the BSA and AML are black and white in terms of conditions surrounding SARs, such as types of transactions and the amount and reoccurrence of transactions, but there is a lack of information directing banks on how to implement these regulations in a real-world environment. Top management at CNB recommends that clarifying the timing

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