Commercial Banks, Credit Unions Report Compliance with New AML Regulations

CHICAGO – (May 2, 2019) – RSM US LLP – the nation’s leading provider of audit, tax and consulting services to the middle market – today announced the release of its Anti-Money Laundering (AML) Survey, which assesses the AML departments from more than 200 commercial banks and credit unions to gauge best practices and challenges in a changing regulatory landscape.

The survey reveals 88 percent of commercial banks and credit unions are confident in their compliance with the new beneficial ownership rules, and 91 percent are confident in their overall compliance with the final Customer Due Diligence (CDD) rule. However, challenges regarding training, technology and efficiency persist, indicating a need for increased guidance.  

“Regulatory scrutiny and enforcement are continuing to put pressure on anti-money laundering programs, and banks and credit unions need to continuously enhance their strategies to address these mandatory changes,” said Rob Farling, national leader of AML & regulatory compliance with RSM US LLP. “We hope that our analysis of similar institutions’ AML functional structures, specifically in relation to CDD and beneficial ownership compliance, can help banks and credit unions keep their own programs compliant and navigate the ever-changing regulatory environment with ease.”

Additionally, the survey sheds light on some of the top pressures banks and credit unions are currently facing and explores opportunities for these institutions to improve their practices in these areas. The issues identified in the survey include:

• Budget Increases: In response to the new beneficial ownership rules, banks and credit unions reported increased spending toward training, personnel and software and operating systems.
• Increased Training: Training of front-line staff is seen as one of the greatest challenges in preparing for the new beneficial ownership rules. This presents an opportunity to provide greater specificity and focus in institutional training.
• Need for Efficiency: Eighty percent of credit union respondents are confident in the technology used to manage compliance with the final CDD rule, but only 66 percent are confident in the efficiency of their compliance efforts.
• Implementing Systems: More than one-third of respondents reported challenges when implementing or modifying systems for beneficial owner data, indicating a need for increased for transparency in this area.
• Modifications for CDD: Most institutions added or modified one or more elements to their compliance programs in response to the CDD rule, including a customer risk rating process and an assessment of the complexity of ownership structure.

To download and read the AML Survey, visit our website here.