BSA-AML Examiner School Case Study eBook

Internal Use Only

BSA/AML Policy and Program

OFAC Risk

Bank’s failure to comply with the BSA and other AML-related laws, rules, and regulatory guidance, as well as OFAC requirements. BSA/AML/OFAC Risk is a subset of Regulatory and Compliance risk as outlined in the Bank’s Enterprise Risk Management Policy. Generally, a vendor or partner, including a Fintech Partner, that supports critical Bank activities related to the Bank’s compliance with this Policy/Program and that would cause the Bank to face significant risk if the third party failed to meet expectations.

Critical Third Party

Fintech Partner

A financial technology company that utilizes the Bank’s services to support the provision of products or services to Bank customers. A Fintech Partner is a Critical Third Party.

Customers sourced through a Fintech Partner. In this model, TS&J establishes a customer relationship with the end-user, while the Fintech Partner principally acts as a third-party service provider or programmanager to the Bank (services may include marketing, provision of front-end technology layer, and customer service).

Fintech

Partner- Sourced Customers

Customers sourced by TS&J and its existing community banking activities.

TS&J Sourced Customers Know Your Customer (“KYC”)

Standards used in the banking industry to verify customers and understand their risk and financial profiles.

Money Laundering

The process by which persons attempt to conceal and disguise the true origin and ownership of illegal funds. Money laundering is generally viewed as a three stage process consisting of placement, layering, and integration: ● Placement involves the introduction of unlawful proceeds into the financial systemwithout attracting the attention of financial institutions or law enforcement; ● Layering involves the moving of funds around the financial system to create confusion and complicate the paper trail; and

TERM

DEFINITION

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