How often do regulators recommend that independent tests of the BSA program be conducted?

Regulators recommend that independent tests of the Bank Secrecy Act (BSA) program be conducted every 12 to 18 months to ensure that the program is effective and compliant with current regulations. This timeframe reflects a balance of sufficient frequency to assess the ongoing effectiveness of the BSA program while allowing banks to address any identified weaknesses or deficiencies. Conducting independent tests within this period helps in adapting to any regulatory changes, improving processes, and mitigating risks associated with money laundering and terrorist financing. Consistent assessment is crucial in maintaining the integrity of the financial institution’s compliance efforts and ensuring that robust measures are in place.

This recommendation aligns with the expectation that financial institutions take their compliance seriously and proactively identify and manage risk. Overall, conducting these independent tests not only helps institutions stay compliant but also fosters a culture of compliance within the organization by keeping BSA/AML processes aligned with regulatory expectations and best practices.