WASHINGTON—An update on how the Financial Crimes Enforcement Network (FinCEN) is enforcing the Bank Secrecy Act (BSA) has been provided by its deputy director, Jamal El-Hindi.
Speaking to the 2019 Money Transmitter Regulators Association’s annual conference, El-Hindi said the BSA/anti-money laundering system “is good, but it can always be improved,” including through innovations that can “help better detect and safeguard against illicit activity.”
El-Hindi repeated FinCEN’s policy statement from December 2018, which encouraged innovation in the banking sector, Buckley Firm reported.
El-Hindi also highlighted recent discussions related to the role artificial intelligence can play in reducing false positives to assist human analysis, and the potential for blockchain technology to enhance transparency through the understanding of customer identity or transaction profiles. He noted that these themes and others emerged from FinCEN’s recent “Innovation Hours Program,” which encourages fintech companies, regtech companies, and financial institutions to present to FinCEN new and innovative products and services for potential use in the financial sector, Buckley Firm said.
The program’s upcoming September meeting will focus on innovations in “know your customer” compliance, BSA reporting, and core inter-bank payment and messaging systems associated with industry anti-money laundering/combating the financing of terrorism efforts, Buckley Firm said.
The Priorities
Additionally, El-Hindi noted that FinCEN’s enhanced supervision of nonbank financial institutions involves “actively prioritizing and engaging in,” among other activities, conducting examinations of “specialized, rapidly evolving” financial services providers; identifying sector data to support FinCEN's analytic endeavors; and developing a stronger framework for risk assessments of the nonbank financial sector “from both the compliance and illicit activity standpoints.”
El-Hindi closed his remarks by encouraging FinCEN and other regulators to discuss with foreign counterparts “the concept of a culture of compliance in the United States and what underpins it, and explore with our counterparts concepts that could underpin a culture of compliance in their own jurisdictions,” Buckley Firm said.