The focus of Ms. Pickett’s address was on the reliance and importance of supporting documentation as it relates to due diligence efforts and the heightened awareness placed on documenting and maintaining the results of such efforts. The automation and documentation control process needed to meet regulatory authorities’ increasing requirements was relayed from the perspective of an organization that recognizes supporting documentation as crucial for AML (Anti-Money Laundering) compliance and avoiding reputational risk.
The seemingly endless documentation requirements that Compliance and Operations professionals must adhere to today were also covered with a focus on regulations of the USA PATRIOT Act, which has extended BSA (Bank Secrecy Act) regulations related to AML requirements to virtually every sphere of business in the United States. Ms. Pickett also addressed the increased documentation and information requirements imposed under the PATRIOT Act’s Section 326 – on CIP (Customer Identification Programs), and other sections such as 313 and 319 (b). Her message on the heightened regulatory, legal, credit and reputational risks associated with documentation and control was very clear.
A live product demonstration of DOC-Tracker, IDOM’s documentation management solution was provided by Lorenna Gonzalez, IDOM Miami LLC’s Product Specialist. DOC-Tracker was relayed as a modular, client-server, web-enabled application that addresses the documentation management and compliance control needs of today’s businesses. The demonstration revealed how DOC-Tracker provides the facility to control compliance requirements of bank specific documentation. It was shown to identify what documents are required, then record and track the receipt of these documents along with information regarding their actual condition/discrepancies. DOC-Tracker was shown not only to facilitate and control the account opening process, but also to help ensure that a bank’s CIP is properly supported by recording identifying documentation and information on customers as well as other related account parties (i.e. beneficial owners, shareholders, political affiliates). It was shown to have flexible access and an automatic link to the bank’s OFAC filter to identify any issues regarding both customers and their related account parties.
Most of DOC-Tracker’s features that support increased regulatory emphasis on compliance documentation were highlighted, along with all other types of documents required for customers, and to support the business/products engaged in that require documentation such as Commercial Lending, Trade Finance, etc. DOC-Tracker's document imaging capability was shown to provide instant access to multiple users of documents, facilitating their review, as well as, the recording/monitoring of document discrepancies noted. Additionally, Ms. Gonzalez emphasized how it can also serve to reduce paper storage expenses and support back-up recovery requirements.
This was followed by a case study presentation which recounted how two major European banks in the U.S. have utilized the DOC-Tracker solution and have reaped the benefits in both internal and external reporting and compliance.
The Director of Compliance and Certified Anti-Money Laundering Specialist at IDOM Miami, LLC, Ilia Rodriguez-Diaz, focused on compliance topics that have been receiving significant press coverage as of late; specifically the Riggs Bank scandal. She described how Riggs Bank’s numerous violations involving their international business and inadequate AML controls resulted in a $25 million dollar civil penalty. Although Riggs may not face criminal prosecution, as no U.S. bank has been indicted for money laundering in the past 13 years, Ms. Rodriguez-Diaz conveyed that several foreign institutions have been indicted for money laundering in the U.S. These foreign institutions have incurred hefty expenses related to legal penalties and forfeiture consequences.
Ms. Rodriguez-Diaz surmised that although Congress is pressing regulators to enforce BSA and its related AML efforts more effectively overall, foreign institutions are much more vulnerable to regulatory disciplinary actions. The audience was advised that Congress’s current concern over enforcement of BSA may translate into much more extensive BSA/AML examinations and increased enforcement actions in the future for all financial institutions.
Documentation collected to support compliance efforts was relayed to be one of the most effective elements to provide examiners going forward. She also emphasized the need to assess each institution’s internal documentation practices and associated risks. Automating compliance efforts, wherever possible to ensure proper support of information gathering, monitoring and verification efforts through quality documentation has become essential in addressing today’s heightened compliance requirements, according to Ms. Rodriguez-Diaz.
In conclusion, IDOM’s Director of Compliance provided the audience with an Internal Documentation Management Risk Review & Assessment worksheet to assist organizations in assessing their own overall documentation management risk in order to determine appropriate actions.
“This was a very informative Symposium and all who attended will bring back to their respective jobs a greater understanding of the current risks in banking compliance,” concluded Stephen Codignotto, IDOM Chairman & CEO.