VIDEO: What should be included in Board BSA Training?
In this Compliance Clip (video), Adam discusses what financial institutions should consider when providing BSA/AML/CFT training to their board of directors. He reviews regulatory expectations and shares practical tips for developing effective board training that supports directors in fulfilling their oversight responsibilities.
Video Transcript
The following is a transcript of this video:
This Compliance Clip is going to answer the question: what should be included in the BSA training for the board of directors?
In order to answer this question, I think it's good to always go back and see what the regulators tell us. And so, we can do that by looking at the FFIEC BSA Exam Manual, which is the go-to resource for examiners when they're conducting a BSA/AML/CFT examination of a financial institution. The BSA Exam Manual says this:
“The board of directors and senior management should receive foundational training and be informed of changes and new developments to the BSA.”
So, to me, this appears to have two distinct requirements. The first is foundational training, which would cover the core elements of BSA, AML, and CFT frameworks. And secondly, is to be informed of changes and new developments in the Bank Secrecy Act. So, what's going on in the BSA AML environment, what has changed, how does that affect us, and what do we need to do going forward. So, that's what the BSA Exam Manual tells us.
Now, the reality is the board is ultimately responsible for your BSA/AML/CFT program, but they're not bankers. They're not BSA personnel. They are probably business owners and leaders in your community that gotten involved in your bank as part of the leadership team. So how much information about BSA/AML/CFT, do they really need to know?
They do not need to know the ins and outs and the finer points of filing a CTR. But what they should understand is the burden of your organization, whether you have sufficient resources, and any potential challenges that could affect your organization where decisions need to be made. And so I take a look at this, and I believe there's a couple of key areas we need to make sure that our directors have received training.
First and foremost, it's a good idea to frame the material. To give them an introduction and history to understand that BSA does not stand for the Boy Scouts of America. It stands for the Bank Secrecy Act, which, of course, is the term that we use for all these different rules that have come together for us to create these anti-money laundering and countering the financing of terrorism policies and procedures and programs in our financial institutions. So, give them an introduction and history. Then talk about what your financial institution is supposed to establish and what you're required to do in your organization to create a program. And this is where we talk about the four or five pillars, however, you want to break it up, whether you throw CDD in its own pillar or in the pillar of policies and procedures.
And then it's important to talk about any applicable changes or activities that took place over the last year or so because that helps us understand what's happened, the current environment, what to expect going forward, and what we need to know about our specific organization and how it applies to us.
So that's the key with any director training: how does it apply to your directors and your financial institution? And so these are the key things that need to be in there.
As far as providing training to your directors, there are some tips I've picked up over the years that are beneficial when we provide training on BSA, AML, and CFT to our board.
First of all, it needs to be short. Yes, it does need to be comprehensive on what a director would need to know, but we do not need a seven-hour training program on reporting suspicious activity like we offer in our store. That's way too much for a director. It needs to be high-level. It needs to be comprehensive in what they need to understand. But we have to understand also that directors are busy, they have a lot of other responsibilities both inside the bank, but also outside the bank. So, it does need to be concise to the point and as short as possible, but not too short. So, that's the key there.
It also needs to be high-level. Again, we don't need to go into the finer points of how to file a CTR, but we do need to help them understand the big picture and how this applies to the organization.
Also, a lot of directors have never dealt with BSA on a first-hand basis. Everything they've heard is second-hand or even third-hand, and so it's important to provide your directors with tips on what to look for in your organization and some strategies and things they can do to fulfill their fiduciary responsibilities as directors in overseeing the BSA, AML, and CFT programs in your organization.
And finally, I'd like to include a handout for them to have more information, if they want it, and to provide proof of content for your examiners to see exactly what was covered in your board training.
And so these are some of the tips that I've come up with over the years. And of course, that's exactly what we do in our board training. Now, you can provide training on your own to your directors using these tips. But if you're looking for an easy way that really is outsourcing it for a fraction of the cost, a very small fraction of the cost of additional BSA staff, we do have a BSA Annual Update program for the board of directors. We also have a BSA basics for the board, but our BSA annual update provides what's going on in the regulatory world and it's been updated very recently.
Our current program is 32 minutes long. We'd like to keep all of our boards trainings around a half an hour. We found that this is the sweet spot for not being too short, but being comprehensive enough that your directors can take away enough information to fulfill their fiduciary responsibility in overseeing your BSA/AML program. And what our Program does, of course, is it provides foundational information about the BSA/AML/CFT requirements. It discusses activity from the last 12 plus months so your directors understand the current environment that we're dealing with. It includes a comprehensive training manual so, that your board of directors can follow along and you could show your regulators exactly what's happened.
Now, this program is designed to be presented in a couple of different ways. We have a couple of different delivery options. You can have your own employee watch our video, see how we provide the training and then use our exact slides and exact manual to provide the training to your board. So you can outsource the pulling together of this training and have your team utilize our slides and see exactly how I present the training in a video so you can provide the training live to your board of directors in person if you choose. You also can provide the training through a video. You can either download an MP4 of the video and stream it during the live board meeting. Or what a lot of our financial institutions have found works really well for the many directors that we've trained over the years is we have a private portal we can set up on our website with a very simple URL, something like compliancecohort.com, which is our site, slash your bank name with a very easy training password that the most technology-challenges director can still access the program without having any issues. Just a URL link they click on and a simple password they enter in, then they watch the training video, and then we've got options to set up for attendance and whatever else you need. So, the private portal makes it very, very easy to provide training to your team.
So, again, you can conduct training any way that's needed. This is how we do it. And if you're interested in to see more how we do it, take a look at our store, compliancecohort.com/store. If you're interested in that for your team, that's great. If not, hopefully, this video has provided you with enough tips to help you enhance your board training and take it to the next level so your directors can fulfill their fiduciary responsibility in overseeing your BSA, AML, and CFT programs in your organization.
That's it for this Compliance Clip.