Author Archives: Ken Agle

Next Level Risk-Based Pricing is Coming: Beyond Decisioning and Pricing is Outcome Analysis

When economic times are good and funds are relatively easy to lend without meaningful short-term risk, most financial institutions find themselves in strong positions from a credit risk and earnings perspective. Yet, the tough lessons of lending and risk over the past 30 years have taught us many times over that economic cycles repeat. It’s an all-too-often forgotten pattern that reminds us that good times, which always seem to feel like they are here to stay, only last so long. Each of the major economic Continue reading →

BSA/AML Systems Survivor

Imagine two scenarios. In the first, you fly to a beautiful, remote island for a carefree week at an exclusive and all-inclusive resort. You spend the week soaking up sun on the beach, enjoying fine dining, and snorkeling in the crystal clear water. Now for scenario two. Same beautiful island, but this time, there’s no resort, no gourmet chefs, and no king size bed. In fact, there’s nobody but you. This time you’re stranded. Despite your circumstances, you’re still able to appreciate the beauty of Continue reading →

How to Optimize Your AML System (Without Hiring Sherlock)

One of the defining characteristics of Sherlock Holmes (besides the deerstalker hat and overcoat) is his almost superhuman powers of deduction. In the first Sherlock novel, A Study in Scarlet, Holmes says, “From a drop of water, a logician could infer the possibility of an Atlantic or a Niagara without having seen or heard of one or the other.” In every Sherlock story since, Sherlock does indeed turn tiny, seemingly insignificant details into solved crimes. Now, if you’re tasked with evaluating a Bank Secrecy Act Anti-Money Laundering (BSA/AML) system, you might Continue reading →

Beneficial Ownership and the Dark Side of the Moon

Originally published on CUInsight.com In the world of Bank Secrecy Act (BSA) and Anti-Money Laundering (AML), it all comes down to perspective. For many financial institutions, the perspective sometimes becomes locked down tight. Day in and day out, the systems look at the same things over and over again. In a sense, it’s like they’re looking at one side of the moon, ignoring what’s on the other side because it is harder to see. To support this analogy, permit me a brief detour to one Continue reading →

Fair Lending Model Validation: Strengthening Your Fair Lending System

Pendulums tend to swing, and the Fair Lending pendulum is no exception. Over the last few years, with the transition of HMDA rulemaking to the Consumer Financial Protection Bureau, and with the CFPB’s new final rule expanding HMDA data collection requirements, it’s clear that the pendulum has been swinging toward a tougher regulatory environment. With the change in administration, however, it appears that the pendulum is going to be heading back the other way. Precisely when and how far it will swing remains to be Continue reading →

The Third Dimension of an AML Risk Assessment

Originally published on CUInsight.com When I was young, a teacher shared an analogy that has always stuck with me. I can’t exactly remember what she called it, but I’ve taken to calling it “2-D Bob Meets 3-D Jill.” My teacher started by sketching a diagram on the board that looked something like this. Bob has invited some friends over to play cards. Everything in Bob’s world is 2-D, including Bob, his friends, the card table, the cards, and even Bob’s house. Everything exists on a Continue reading →

The Look-Back Project: An AML Marathon

The annual New York City Marathon is just a little over two weeks away. If you’re planning on running in it, you hopefully began training many months ago. Unless you’ve got some superhuman characteristics, the average person can’t simply run a marathon on a whim, without any training. However, if information comes to light that indicates your financial institution has some holes in its AML monitoring process and may have missed some suspicious transactions, you could suddenly be feeling like you have to run a Continue reading →

Two Years and No SARs/CTRs? Someone May Be Eyeing You as a Weak Link

Yes, summer is already over and fall is upon us. That means sweater weather, changing leaves, and pumpkin spice. But it also means the year is winding down. If it was your New Year’s resolution to file at least one SAR this year, time is getting short. And if you still haven’t filed any, it might be time to double check to make sure you aren’t missing anything. If it’s been awhile since your financial institution has filed a CTR or a SAR, you may Continue reading →

Validation: The Pièce de Résistance of Anti-money Laundering

Originally published on CUInsight.com. Even the best kitchen in the world—equipped with a brick oven, top-of-the-line equipment, and the sharpest knives—can’t turn a bad cook into a great one (even though it could help). The substandard cook still needs to learn some critical cooking skills before the dream kitchen can produce the pièce de résistance. So it makes sense that even the best anti–money laundering (AML) monitoring system in the world—perfectly optimized with no expense spared for the most current technology and automation—can’t guarantee effective Continue reading →

Hey Batter Batter, Swing! Good Training Practices for AML Monitoring

Spring training for Major League Baseball is long over, the regular season is winding down, and playoffs will soon be upon us. Over the course of a long season, the teams that spent their time during spring training actually training and preparing frequently find that it makes the difference between being a playoff contender and an also-ran. In a similar fashion, efforts to thoroughly validate an anti-money laundering system can pay off in the long run. How do you achieve a strong AML system? Here are four Continue reading →