VIDEO: How to Conduct BSA Training for Directors

In this Compliance Clip (video), Adam discusses how financial institutions can approach BSA training for their board of directors in a way that aligns with examiner expectations while remaining practical and effective. Adam highlights key considerations around balancing foundational knowledge with ongoing updates, as well as tailoring content to a board-level audience.

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Video Transcript

The following is a transcript of this video:

This Compliance Clip is going to talk about how to conduct BSA training for your board of directors.

In order to understand what we should be training, let's take a look and see what the examiners tell us their expectations are.

In the BSA exam manual, it says, “The board of directors and senior management should receive foundational training and be informed of changes in new developments in the Bank Secrecy Act.” So when we look at this text, it appears to have two distinct requirements. The first being foundational training, talking of course about the requirements for a BSA/AML program in your financial institutions. Things like the five pillars, the requirements for reporting SARS and CTRs. And also a second requirement of informing your directors of changes and new developments in the world of BSA over the last year or so. So keeping them apprised of what is changing so that they can understand how that would affect your financial institution

These two requirements are essentially what we need to provide our directors when we're conducting BSA/AML training for our board of directors.

Now, there's a couple of different ways we can do this. We can either provide the foundational training in year one, and an annual update in year two, or we could provide both at the same time - foundational training and an annual update at the same time. Regardless, this is what the examiners are expecting - both those foundational pieces, as well as what has happened over the last year or so.

Now, the reality is the board is ultimately responsible for your the BSA/AML/CFT program, but how much do they really need to know? They're ultimately responsible, yet they're not going to be diving into the weeds like your BSA professionals, your BSA officer, your BSA analysts. They don't need to know that depth of information. So, how do we train our directors and feel comfortable that we've satisfied the training requirement that the examiners expect our directors to have?

Well, we can do this by looking at a couple of things. I think one of the best things we can do is, first of course, make sure they understand what BSA stands for. BSA does not stand in this context for the Boy Scouts of America. It stands for the Bank Secrecy Act and those anti-money laundering rules that are in the United States. And so giving an introduction to history is a good way to start.

Then to talk briefly about the five pillars of BSA and what should be in a BSA/AML program at your financial institution. Then it's important to discuss the changes or activity that have occurred over the last year because, of course, they're responsible for making sure your financial institution is watching for changes and implementing those changes in an appropriate amount of time.

And then it's always a good idea to tell directors how this applies to them and how it applies to your financial institution, keeping that in mind.

When providing BSA board training, and I've trained probably thousands of directors at this point, there are some tips that can be useful.

First of all, it is important to be comprehensive, but you have to understand that directors only have so much capacity in any given situation. Now, those of us who are in the BSA world, we like to take deep dives, but our directors are not in the BSA world. They're in the banking world. And maybe they're not even in the banking world full-time. They probably have their own business, but they're a director who has to help oversee the bank. So they really need it to be within a certain period of time, it can't be too long. It's important to not give directors seven hours of SAR training, which I have a program that runs seven hours, but that would never work for directors. And so it's important to be comprehensive, but also to be short, so really pick and choose what we discuss with our directors.

It's also important to keep at a high level. If we're using acronyms like BSA, AML, CFT, that's going to be too in the weeds. We need to make sure that our directors understand what the Bank Secrecy Act is and what it means. What CFT stands for - Combating the Financing of Terrorism, or AML - anti-money laundering. What those terms mean and to keep it high level, and to not assume that they have an in-depth understanding of BSA.

It's also a good idea to help your directors understand what to look for in their organization and how to fulfill their fiduciary responsibility as a director. And I always like to provide a handout for them so that they can read it on their own time, and so you can show your examiners exactly what was covered.

So, those are some of the key foundational pieces that I like to include in BSA training.

Now, in fact, in our store, we have two different BSA for director training programs. One is a foundational training program (BSA Foundations for the Board), which runs about 30 minutes just on the core aspects of a BSA/AML program, and it does conclude with tips on what directors can do to fulfill their fiduciary responsibility in the financial institution. The second program I have is our BSA Annual Update for the Board of Directors. That includes a shortened version of the foundations for directors on the BSA/AML program, but also includes an update of what has happened over the last year or so. And so in that program, it runs 35 minutes long. It's not a two-hour program. It's still comprehensive, but it's still a short enough amount of time for directors to easily digest and to have that comprehensive training that's expected by your auditors and examiners.

So in our BSA Annual Update, we provide foundational information, and we discuss activity from the last 12 months or so. We also include a comprehensive manual that they can use to find additional information if they choose to, and to show your examiners exactly what's included in that training.

Now, the way we present our BSA Annual Update for the Board of Directors is we designed it to be a tool for your employees. So if your employee wants to just take our slides and use our slides as training, you can watch a video on how I did the training, and then you're able to then take the exact slides and the exact manual I used, saving you prep time, and you can present that live in front of your directors and do the training yourself. Or if you choose, we have a video. And you can use that video to download it and stream it during a live meeting. Or, we actually, one of my favorite things we've done is we set up a private portal. This seems to be one of the trends that I've noticed in the financial institutions we work with, is to use this private portal to give the training to your directors and give them access in advance of the board meeting. That way, you're not using valuable board time to train your directors. You can have them do the training in advance on their own time at a time that works for them. Then they come to the meeting, the training's complete, they can attest to it and prove it at the board meeting, but you don't have to use board time to actually conduct the training. And so we have private portals available for our BSA Annual Update and our BSA Foundations programs.

Now, if you're interested in either of those programs, you can take a look at them and check them out on our website at compliancecohort.com/store and just scroll down to the Board of Directors training section. You'll see a variety of Board of Directors training programs available for you.

Now, in fact, one of the things I like to do is if you want to take a look at our program and see if it's going to be a fit for you. You can do that. Just email my team at members@compliancecoher.com. If you have any questions on that program, you can email them there as well.

That's all I have for this Compliance Clip.