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 →

Figuring Out What to Say and How to Say It to the Board of Directors is Like Balancing on a Bicycle

“Life is like riding a bicycle. To keep your balance, you must keep moving.” -Albert Einstein Successfully riding a bike to get where you want to go requires patience, knowledge, and experience. Determining what to say to your board of directors is like learning how to balance on a bicycle. The “what to say” is like leaning and pedaling on a bike. If you lean too far to one side or the other, you’ll fall off. If you pedal too slow, you won’t go anywhere; Continue reading →

Three BSA/AML Errors to Avoid

Bank Secrecy Act and Anti-money Laundering (BSA/AML) enforcement is shaping up to be a hot compliance topic this year. We’ve heard from the NCUA that one of its supervisory priorities for 2018 will be BSA compliance. There are also some big changes coming in just a few months with FinCEN’s new customer due diligence and beneficial ownership requirements. What all this means is that you’ll want to pay particularly close attention to your BSA/AML program and procedures throughout 2018. To ensure your AML program is Continue reading →

The Top 5 Posts of 2017

2017 is now gone, but it’s always worth a look back to see where you’ve been. Here’s a look at the top 5 most popular AdvisX blog posts of 2017. 1. The Elephant in the Room: Fair Lending Regression Analysis We’ve all heard the expression, “how do you eat an elephant? One bite at a time.” The inventor of this phrase must have been marooned and starving on an elephant-infested island, because seeing an elephant and wondering, “how am I going to eat that thing?” is Continue reading →

Front-to-Back AML Validation: How to Envision What You May Be Missing

Originally published on CUInsight.com For those of us who experienced a partial loss of vision at a relatively young age, we likely remember the day that we learned we needed glasses. The process typically began with an elementary school teacher who noticed our permanent squint at the chalkboard. Before we knew it, we were sent to the school nurse for a primitive eye exam consisting of a few “E’s” in all of their assorted directions. Failing that, we were sent home with a note to Continue reading →

AML System Assembly: Don’t Ditch the Instruction Booklet

Whether it was a model airplane, some Legos, or a Swedish bookcase, odds are you’ve purchased something that requires some at-home assembly. What all these things have in common is the instruction booklet. Not all of these instruction booklets are created equal, however. Some are clear, precise and easy to follow, while others are so vague and complicated that trying to decipher them often results in pulling out your own hair and a few choice curse words. At one point or another, you may have 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 →

New York’s 504: BSA/AML Requirements You May Want to Start Wearing

If you’re a fashion fanatic and you want to get a jump on what will be hot next season, you’d probably want to look to the current fashion trends in New York. After all, New York, New York is known as one of the fashion capitals of the world. Now, if you’re in charge of BSA/AML compliance at your financial institution, your regulators will not be amused if you’re behind on anti-money laundering efforts, even if your compliance team looks ready to walk the runway. They’ll 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 →