Fostering Innovation for Stronger BSA/AML Compliance
Late last month, the Financial Crimes Enforcement Network (FinCEN) launched its Innovation Hours Program to gain insight into the opportunities and challenges of utilizing Bank Secrecy Act and anti-money laundering (BSA/AML)-related innovative products and services for the financial services sector. FinCEN recognizes that using new ways of existing tools or adopting new technologies can help a financial institution strengthen its AML compliance program. This in turn can lead to more effective and efficient risk identification, transaction monitoring and suspicious activity reporting. The FinCEN Innovation Hours Program gives financial institutions, technology providers and other firms involved in financial services an opportunity to discuss and display their innovative products, services and approaches.
Held on the second Thursday of each month, from 9:30 to 12:30 EST (unless otherwise arranged), the Innovation Hours will primarily be at FinCEN’s offices in the Washington, DC, area. FinCEN will also hold regional Innovation Hours outside of the Washington, DC, metropolitan area. FinCEN will publically announce any regional Innovation Hours, including instructions on how to participate. Generally, presenters will have up to one hour for their presentation or demonstration. Innovation Hours may also focus on a particular topic during a given month. FinCEN will publish information about the timing, location and topics on its website here.
FinCEN has a frequently asked questions (FAQs) page with additional information on the purpose and operation of its Innovation Hours. An FAQ on the minimum requirements to participate in Innovation Hours states that:
- The requester provides or uses financial or regulatory products or services that comply with BSA regulations or are intended to enhance compliance with those regulations.
- The presentation or demonstration addresses how such products or services, or innovative uses of existing tools, can enhance financial institutions’ BSA/AML compliance programs, including, for example, aspects involving risk identification, transaction monitoring and suspicious activity reporting, or otherwise improve the effectiveness and efficiency of the AML and countering of the financing of terrorism (CFT) framework to make more valuable information available to law enforcement to better protect the U.S. financial system.
- Products must be in production or ready for deployment.
- The company is not the subject of a federal or other criminal or civil enforcement action.
To apply for an appointment, companies are to submit a request through the Innovation Hours webpage using the provided request form and questionnaire.
FinCEN notes it “will not provide formal or binding approval, rulings, guidance or otherwise opine on the use or structure of the product or service that is the subject of the presentation or demonstration.” It will also prioritize requests from companies that further along the process in developing and using BSA-related innovative products and services. FinCEN also cannot “recommend or endorse the products of any company. Participation in the Innovation Hours Program does not constitute a recommendation, endorsement or other imprimatur by FinCEN.”