Suspicious Activity Reports (SARs) play a pivotal role in safeguarding the integrity of the financial system and combatting financial crimes. Financial institutions have a vital responsibility to contribute to a safer financial environment by diligently filing SARs with the Financial Crimes Enforcement Network (FinCEN)/BSA.
Let’s explore the best practices and guidelines for crafting SARs that can assist law enforcement in their efforts to thwart illegal activities and protect clients and communities.
Ensure your team is well-trained and knowledgeable about SAR regulations
This should be your starting point in ensuring that your SAR filing process follows the correct regulations and practices. Because BSA filing means reporting activity to the government, you want to ensure that your team knows what sort of activity and conditions warrant filing a report. Better-trained teams file more thorough and effective reports.
Additionally, training your team to know how to correctly fill out a SAR can ensure that the right type of information is communicated in the filing and increase their efficiency in reporting. SARs can be time-consuming to fill out, with the narrative section alone taking anywhere from 30 minutes to 3 hours to write. Proper training will boost efficiency and productivity, as well as reduce issues in the resulting reports.
There are many options to train your team on SAR best practices. Online courses and seminars are prevalent and can be found quite easily. In-person courses can also be found to assist team members in their learning. Experienced team members can mentor less experienced team members in correctly looking for suspicious activity and documenting it in the reports.
A few recommended training resources:
- American Bankers Association BSA/AML: SAR Filing Training Course
- FinCEN offers resources learn about suspicious activities and how to spot them
Use tools that can automatically flag suspicious activity, such as Transaction Monitoring Software
Spotting suspicious trends without the help of technology is time-consuming and error-prone. By the time you can examine enough transactions to spot concerning activity, even more suspicious activity has likely occurred!
Tools such as Transaction Monitoring software can assist with this. By continuously monitoring transactions as they occur, Transaction Monitoring tools can automatically flag transactions in real-time if they break predefined rules or match other criteria. By alerting your team to only those concerning transactions, it boosts efficiency and streamlines your team’s processes.
Effectiv’s Transaction Monitoring solution can assist your team with catching potentially fraudulent transactions quickly so that your team can investigate and determine what should be reported.
Report suspicious activity as soon as possible
When you have gathered enough information to be sure that a situation requires reporting, there’s no reason to wait! It’s imperative that suspicious activity be reported as soon as possible to ensure that the proper authorities can investigate.
Once again, proper training of your team and using the right tools will ensure that they can quickly recognize suspicious activity and document it quickly and efficiently. The sooner it can be investigated, the better, to ensure the safety of your organization and customers.
Use tools to pre-fill forms to ensure data consistency
Gone are the days when the only option for filling out a SAR means starting from scratch! With modern reporting tools, the time-consuming process of filling out SARs can be drastically reduced by pre-populating forms with standardized Filing Institution data, automatically filling subject and activity information with data from fraud case management systems, and utilizing templates and AI generation methods to speed up the narrative creation process.
With Effectiv’s SAR Filing feature, we take the headache out of SAR filing for your team by keeping consistency in Institution Information across forms, utilizing information from cases automatically, and more!
Ensure your narrative clearly describes the activity and timeline
The narrative section can be by far the most intimidating part of creating an effective SAR, but it is also extremely important. Narratives that are insufficient make analysis difficult and can slow down investigations.
Activity should be very clearly documented, including suspect information, relationships, why the activity is considered suspicious, and very clear and concise timelines. Additionally, referring to attachments in the narrative is discouraged because the information that might be in spreadsheets and similar attachments might not be easily added to the FinCEN database.
Luckily, the FDIC provides some insight into what is considered insufficient when it comes to narratives to assist your team in ensuring that it follows best practices.
Continue to monitor for more suspicious activity
Suspicious activity is not a one-time event but rather a series of events over time. Even after a SAR is filed with FinCEN, your team should continue to monitor for ongoing suspicious activity from the same subjects.
Follow-up reports can be filed as more activity is detected, which can further strengthen an investigation by the authorities. Be sure to report in a timely manner to ensure to assist with ongoing investigations.
Suspicious Activity reports can be complicated and time-consuming, but with the proper training, resources, and tools, your team can boost reporting efficiency and be sure that the information you communicate to FinCEN is thorough.
At Effectiv, we recently released our own in-house BSA filing solution aimed at helping teams to create reports more efficiently. Starting with SARs, we have crafted a modern, more friendly experience than what most reporters are used to.
We have painstakingly recreated the well-known SAR report into a sleek, modern UI and added time-saving features such as the ability to standardize and pre-fill institutional information across all reports, import data from our case management system, and validate information on the fly to ensure that reports contain the proper information. We package these reports up into XML files that can be easily uploaded into the BSA E-File system, saving teams time and effort.
Keep on the lookout for more compliance tools coming soon, and reach out to one of our team members if you are interested in taking advantage of our modern SAR Filing solution.