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Compliance Corner - Suspicious Activity Reports (SAR)

Author: Beth Seals

On an annual basis the Financial Crimes Enforcement Network (FinCEN) publishes SAR statistics from the prior year. [1] The report is in excel and can be downloaded for review. There are nine tabs with specific information on each tab. The first tab is the number of SARs filed by month and year for the last ten years. The second tab has the number of SARs by state and year, and the third tab takes the filings of states and shows the percentage overall.

The fun and interesting tabs are tabs four, five, eight, and nine. These are where they break down filings by types of suspicious activity, product types, and instrument types. I like reviewing these twice a year. At the beginning of the year, I look to see what the trends were. In fraud, check was the top type of suspicious activity, with ACH in second place. I then review what controls are implemented in my institution for check and ACH fraud, and ask myself, are they sufficient? In product type deposit account is number one with debit card in second. I review the alerts I have in place to see if they are mitigating suspicious activity.

You can use this tool in multiple ways to ask if your controls or alerts are working the way they are intended. As an example, U.S. Currency is the number one instrument type filing and suspicion concerning the source of funds is the number one type of suspicious activity. If these are not concerns in your bank or what you typically file on, you can see where you are in comparison and again verify your controls. This might also prompt you to consider that while you may not see these issues now, do you need to add controls or tweak the ones you have?

As yearend gets closer, I like to review the report again to see if my alerts or controls found the issues I thought they would. If you haven’t reviewed this report, I encourage you to try it. To me, this report is one more tool to use to assess my program.

[1] https://www.fincen.gov/reports/sar-stats/sar-filings-industry