FinCEN’s Increased Remote Surveillance of E-Money and Payments AML Controls

What this means for US Financial Industry Firms

FinCEN has significantly increased its remote monitoring of AML controls for MSBs, Payments and E-Money Firms, using powerful computing and AI methods to identify shortcomings.

Recent actions include a $3.5 million penalty on Paxful and a record $1.3 billion against TD Bank as well as action taken against over 100 MSBs following just one surveillance operation.

FinCEN penalises based on Financial Institution’s AML Compliance Programs shortcomings, not the size of firm, so any firm, regardless of whether they have 10,000 employees or 10, could suffer multi-million-dollar penalties if found to be in breach of BSA / AML guidance and regulations.

Firms shouldn’t wait until FinCEN analyses their data, you need to act now to ensure your controls and processes are effective and up to date to avoid potential enforcement action and penalties.

The market isn’t used to this type of remote monitoring, which uses powerful AI techniques to mass identify potential problem firms. Any reporting and data submitted can now be used, and cross referenced with other data sources to build a much clearer picture of what would be expected of the firm versus what is being submitted. These tools are now being deployed across ever greater numbers of firms.

FinCEN and the US Treasury have been emphasizing their commitment to rooting out potential cartel-related money laundering from the US financial system, highlighting that they will utilize all tools available to them to stop terrorist cartels, drug traffickers, and human smugglers. Their attention on this issue, along with the tools and data sets utilized, are likely to continue to grow over the coming year.

What should firms do?

Firms should review all their AML / BSA controls and processes, including an independent review by Neopay Global’s AML Compliance Professionals, to identify any issues before they come to the attention of FinCEN.

Firms also need to ensure their systems are appropriately future-proofed and can identify and respond to changes in the environment, regulation, guidance and enforcement regime.  This should include ensuring that you have access to the appropriate specialist expertise and information.

Additionally, as required by the BSA, your firm’s AML policies and procedures depend on your team being effective, ensuring that your training and awareness programs are tailored to your firm’s or industry’s needs, and that they empower employees to become AML experts, ask questions, and raise concerns.

This includes your Senior Management and Board Members. Firms should ensure they have access to workshops, one-on-one advice, and tailored support so they can properly protect your business from the ever-changing and increasing AML and Terrorist Financing risks and exposures.

How Neopay Global Can Help

• Audits and Review: Our audits provide an independent, accurate and detailed review of your financial crime and other compliance frameworks. Findings are presented clearly along with practical recommendations for improvement.  We take time to make sure you understand our findings, enabling you to implement the necessary controls to protect your business.

• Compliance Framework Development: Ensuring that your company adheres to all the regulations necessary is the key to avoiding fines and loss of reputation. We offer tailor-made compliance solutions that reflect existing industry regulations and fraud prevention methods.

• Training and Awareness Programs: We provide engaging training programs that focus on practical, real-world scenarios, helping your team stay vigilant and equipped to identify suspicious activities.

• Ongoing Virtual Compliance Support: We provide continuing support, including regular updates on new trends, regulatory requirements, and best practices for maintaining effective frameworks and controls.

To discuss how Neopay Global can strengthen your AML / BSA framework and help safeguard your firm against enforcement risk, contact us here and speak with one of our AML compliance professionals.