US regulators encourage institutions to be innovative with AML/BSA compliance

The Federal Reserve Board has made a joint statement with four other US regulators to encourage depository institutions to explore innovative ways to meet compliance.

This group statement hopes to support the development of innovative solutions for bank secrecy act (BSA) and anti-money laundering (AML) compliance and strengthen the financial system from attacks.

Joining the Federal Reserve Board was the Federal Deposit Insurance Corporation, the Financial Crimes Enforcement Network, the National Credit Union Administration, the Office of the Comptroller of the Currency and the U.S. Treasury’s Office of Terrorism and Financial Intelligence.

A statement was made in recognition of how existing tools and new technology, such as AI, can heighten banks and credit unions systems to identify and report money laundering, terrorist financing, and other illicit financial activity.

These regulators will not penalise any firm which has sufficient AML standards and does not wish to pursue new, innovative solutions.

To assist the new innovation efforts, the regulators will continue to engage with the private sector and interested parties. All of the agencies have/will establish projects or offices to support the implementation of innovation and technology in the financial system.

Banks and credit unions are being advised to follow existing communication protocols with their respective regulators; however, these projects and offices could act as central points of contact for communication with these new developments.

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