Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Model Validation

Darling Consulting Group (DCG) is a recognized leader and premier provider of independent risk management consulting and regulatory-compliant model validation services. Our validations align with regulatory model risk management guidance (OCC Bulletin 2011-12, Federal Reserve Board SR 11-7, and FDIC FIL 22-2017).

DCG understands the adverse consequences associated with an insufficiently strong AML program. A breach in the AML program will cause heightened reputational, operational, legal and concentration risk. In recent years, DCG has observed that some banks have faced challenges keeping up with regulatory expectations around their BSA/AML models. Not only are BSA/AML models getting more complex in terms of methodology and technology, the regulatory requirements change on a regular basis. DCG’s BSA/AML model validations are designed to help banks tackle these challenges head-on and mitigate their BSA/AML-related risks.

Our BSA/AML-related validation and advisory services include:

  • Customer risk rating systems
  • Customer due diligence (enhanced due diligence) models
  • Transaction monitoring models
  • Sanctions screening models (related to OFAC)
  • Advisory around effective know your customer (KYC) procedures, including an evaluation of systems, controls, policies, individual responsibility and management oversight

While each validation is different, DCG’s BSA/AML model validations will generally feature the following key components: an evaluation of conceptual design, the technical system, the underlying data, and the overall process. Our validations focus not only the compliance aspect of BSA/AML models, but also on common regulatory concerns, such as failure to identify elevated risks and failure to identify unique institution-specific AML risks. The goal of our validation is to not just to aim for regulatory compliance (which is important too), but also to help improve your overall AML process for strategic benefit.

Contact us to learn more or schedule a meeting with DCG’s experts. We look forward to the opportunity to provide you with a comprehensive BSA/AML model validation!