Under BSA/AML, which components are essential for ongoing compliance?

Under BSA/AML, which components are essential for ongoing compliance?

• A. Ongoing transaction monitoring and suspicious activity reporting only.
• B. Customer onboarding and periodic risk assessments only.
• C. Customer due diligence/KYC and ongoing transaction monitoring with suspicious activity reporting.
• D. Annual tax reporting and revenue forecasting.

Answer: (C)

The key idea is that ongoing BSA/AML compliance rests on knowing who your customers are and continuously watching their activity, with any suspicious behavior promptly reported. Onboarding establishes who the customer is and assesses risk through customer due diligence (KYC). But because risk can change, this check must be ongoing, updating information as needed and keeping the risk assessment current. Ongoing transaction monitoring then continuously analyzes account activity for unusual patterns or thresholds that could signal money laundering. When something suspicious is detected, a Suspicious Activity Report (SAR) is filed with the authorities. Together, knowing the customer (KYC/CDD) and actively monitoring transactions with timely reporting create a complete, effective ongoing compliance program. The other options miss either the ongoing monitoring, the reporting requirement, or the essential KYC/CDD element, or they focus on items not central to BSA/AML.

The key idea is that ongoing BSA/AML compliance rests on knowing who your customers are and continuously watching their activity, with any suspicious behavior promptly reported. Onboarding establishes who the customer is and assesses risk through customer due diligence (KYC). But because risk can change, this check must be ongoing, updating information as needed and keeping the risk assessment current. Ongoing transaction monitoring then continuously analyzes account activity for unusual patterns or thresholds that could signal money laundering. When something suspicious is detected, a Suspicious Activity Report (SAR) is filed with the authorities. Together, knowing the customer (KYC/CDD) and actively monitoring transactions with timely reporting create a complete, effective ongoing compliance program. The other options miss either the ongoing monitoring, the reporting requirement, or the essential KYC/CDD element, or they focus on items not central to BSA/AML.