This week, one in which FinCEN has been increasingly active, the regulator announced that Bank Secrecy Act (BSA) reporting institutions spend 5.4 million hours of work investigating, evaluating cases and filing Suspicious Activity Reports (SARs) at an annual cost of approximately $206 million!
Yet, the release, in which FinCEN hopes will result in feedback as part of its SAR renewal filing, acknowledges that the figures, which represent a weighted average of $48.18 an hour, most likely significantly underestimates the burden of reporting.
According to the American Bankers Association, the regulator “is re-analyzing how it calculates the burden imposed on financial institutions for filing the form, trying to capture the impact that technology has on submitting these reports. Previously, FinCEN based its assessment of the SAR regulatory burden on the functions associated with filling out the SAR form itself, but FinCEN noted that SAR filers spend a great deal of man-hours and money on monitoring systems, alert reviews, case reviews and documentation well before a decision is made to file a SAR.”
As FinCEN noted, the feedback is a “part of its continuing effort to reduce paperwork and respondent burden.” With TM systems producing a substantial amount of false positive alerts, the focus on capturing the real cost of reporting is a step in the right direction and beneficial to all parties involved, which we’ll explore further in Part 2 next week. Stay tuned!