Earlier this year, former Risk Officer at U.S Bank Michael LaFontaine was fined $450,000 for a “failure to prevent violations of the Bank Secrecy Act,” according to The Wall Street Journal. U.S. Bank had already been fined $613 million in 2018 for weak anti-money laundering controls, with enforcement action specific to LaFontaine.
Before and during LaFontaine’s tenure, U.S. Bank used a transaction-monitoring software that placed a cap on the number of alerts generated, preventing the bank from filing suspicious activity reports, thus limiting the ability of law enforcement agencies to spot criminal activity.
While LaFountaine’s intentions are unclear, there’s one sure thing that led to his downfall: the bank’s AML monitoring software was inadequate. The Wall Street Journal sums it up in a quote from FinCEN Director Kenneth Blanco:
“FinCEN encourages technological innovations to help fight money laundering,” Mr. Blanco said, “but technology must be used properly.”
Is Your Technology Doing Enough to Ensure AML Compliance?
Global AML regulations mandate that organizations in the financial industry clarify money sources and eliminate any associations with financial crimes, terrorism, or corruption. Otherwise, they face severe financial penalties and reputational damage, as we saw in the U.S. Bank/LaFontaine case. It’s financial institutions’ responsibility to ensure that their technology and AML screening process is up to par.
Instead of relying on archaic technology, Vital4’s AML/KYC platform is fully automated, using machine learning, AI, sentiment analysis, and other state-of-the-art systems to find blind spots that are often missed. Vital4 offers the most compliant AML/KYC search available by combining their PEP, Global Watch Lists/Sanctions, Adverse Media, and Global ID Validation offerings into a convenient and comprehensive package. With a state of the art cloud-based software, users can implement KYC/AML screenings without disrupting their current workflow.
As more things make the switch to digital (as we’ve seen accelerated by the COVID-19 pandemic), there are more opportunities for fraud and an increased need for fraud protection. If you’d like to learn more about how Vital4’s effective AML/KYC Data Solutions can support your compliance efforts, click here.