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Compliance

How Will Digital Account Opening Impact Your BSA Team?

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MANTL’s digital account opening software automates over 90 percent of KYC decisioning, helping to reduce fraud and making it easier for community banks to comply with BSA regulations.

Small and large financial institutions alike are required to adhere to the same Bank Secrecy Act (BSA) regulations. The associated costs and workload, while manageable for large institutions, can be burdensome for smaller compliance teams. Fortunately, by adopting digital compliance automation tools, banks of any size can transform their compliance processes and improve customer experience, boosting both acquisition and conversion.

Digital account opening software has the potential to relieve much of the strain that currently falls on compliance teams at community banks. In particular, MANTL’s platform is designed to automate decisioning workflows by implementing processes that reduce fraud and false positives. Banks working with MANTL have seen at least a 90 percent automatic decisioning rate, reducing their BSA teams’ caseloads and enabling a renewed focus on big-picture compliance initiatives.

Meeting the Requirements of the Bank Secrecy Act

For many banks, maintaining BSA compliance can be expensive. Community banks in particular may not be able to afford enough personnel to manage a high load of potential fraud cases, especially within the allotted time limitations. However, the costs of failing to comply are even higher, as institutions of all sizes can face stiff fines.

While in theory the BSA provides necessary protective measures, in practice the result is often that banks are hesitant to invest in new technology or services because of the potential impact on compliance. And even foundational banking processes, like account opening, can become highly inefficient if bank staff must devote an excessive amount of time to KYC/AML procedures.

How Digital Banking Impacts Compliance

Often, BSA teams find that legacy technologies are not compatible with the development of fast and accurate compliance workflows. The alternative is newer technologies that can augment or replace legacy systems in order to automate key processes — while also maximizing compliance protections. In fact, the U.S. Department of the Treasury has stated that private sector innovations like these are critical for effective BSA compliance.

To this end, MANTL’s digital account opening software is built to help with the following compliance pain points:

Automating KYC/AML Evaluations

KYC and AML decisioning during the account opening stage is a backbone of BSA compliance. MANTL’s software enables community banks to easily set up automated, machine-learning-based workflows for KYC/AML evaluations. These workflows are built to capture and analyze the data and context clues necessary to sniff out fraudulent activity while producing fewer false positives.

Banks can set up the software to use specific data points to build a comprehensive profile of each applicant. MANTL then cross-references information from more than thirty data sources and picks up clues that tend to indicate fraud — like auto-generated email addresses, IP addresses that don’t match zip codes, and hundreds of other potential signals. This capability allows banks to safely use the non-documentary method for verifying applicant identity.

Banks control this KYC decisioning workflow in real time, with the ability to check the software settings against their own standards. With MANTL, banks can expect to automate about 90 percent of application reviews, with some banks automating KYC decisioning up to 98 percent. MANTL automatically handles the customer-facing elements as well, by sending out approvals or “adverse action” notices to customers.

Reducing False Positives

Typical transaction monitoring systems generate a relatively large number of false positives. This is because they’re weighted toward overly cautious risk scores. At best, false positives add up to human hours, as they must be investigated quickly and reported if suspicious. At worst, they can lead to banks closing down legitimate accounts or rejecting worthy applicants out of an abundance of caution.

In the context of account opening, BSA/AML software that triggers too many false positives for potential customers leads to a similar BSA team burden. KYC decisioning, for instance, can create false positives that impact customer experience. And it can prevent those customers from continuing in the account opening process, as many are deterred by the additional barrier.

Identity checks are critical. But if your system flags a high proportion of applicants as suspect, then the technology isn’t doing its job. Because MANTL’s software allows banks to draw automatically on many online data points while remaining responsive to important context, the AML decisioning workflow triggers fewer false positives, offering your BSA team a reprieve from their otherwise high fraud caseload.

Streamline the Compliance Process

Using MANTL for the digitization of your services offers your compliance team a few critical advantages. As noted above, automation is key. Manual intervention slows down everything — from the account opening process to fraud investigation and auditing. When specific workflows and processes can be effectively automated, important resources and staff are made available for other tasks. Should actual risks emerge, your team now has the bandwidth to address them. But they can also spend more time focusing on proactive strategy rather than dealing with small fraud cases.

MANTL is also designed to make the auditing process more streamlined by storing evaluations in one place and in an easy, accessible format. BSA teams can simply view the MANTL console or the KYC/AML tools to pull compliance information for specific individuals, including identification data sources and outputs, contextual information, verification processes, potential risks, and the ultimate decision.

Digitize BSA Compliance to Stay Competitive

Banks reap the benefits of digitization internally, by reducing busywork for their BSA teams and improving their overall compliance efforts to help avoid fines and penalties. But for smaller financial institutions and community banks, choosing MANTL’s digital account opening software isn’t just a way to streamline compliance — it’s also an opportunity to improve their competitive status by offering customers an easy-use-use modern application. With MANTL, banks can reliably avoid fraud on the backend, while offering a fast, responsive customer front end optimized for modern banking.