Renaissance of consensus order regulation on cryptocurrency evolution

FTI Consulting was engaged by a financial services client to assist them in remediating and improving their Bank Secrecy Act/Anti-Money Laundering (“BSA/AML”) program following a consent order issued by the Office of the Comptroller of the Currency (“OCC” ). Across seven workstreams, our experts helped the bank mature from a start-up to a more established institution after being regulated as the first of its kind in the crypto-native sector.

Our impact

• Strengthened compliance framework: FTI Consulting has improved the bank’s compliance framework by strengthening its automated transaction monitoring system, enhancing its third-party risk management (“TPRM”) program and improving its AML client risk assessment tool and documentation (“CRR”).
• Enhanced cybersecurity measures: FTI Consulting conducted an in-depth assessment of the bank’s cybersecurity program, providing actionable recommendations to improve security measures, ultimately reducing the risk of cyber threats and potential data breaches.
• Customer Remediation and Regulatory Compliance: FTI Consulting assisted the bank in remediating alleged deficiencies in its BSA/AML program, ensuring compliance with regulatory requirements.
• Greater operational efficiency: Thanks to the expertise and support of FTI Consulting, the bank has experienced greater operational efficiency in various areas, with likely future cost savings and improved risk management.

Our role

• Validation of the TRM Labs model: FTI Consulting performed an independent model validation of the bank’s automated transaction monitoring system, TRM Labs, using OCC Risk Management. The client was provided with a final model validation evaluation report with our methodology, observations and recommendations based on our testing and an assessment of conceptual robustness, ongoing monitoring and analysis of results.
• Third Party Risk Management Program Consulting: FTI Consulting assisted the bank with its TPRM program by conducting a current state assessment and using the findings to drive program design improvements through onboarding procedures, vendor selection, subject matter expert support, project reporting for backlog of onboarding, governance, inventory management, active management process, and initial integration support.
• Customer risk assessment: FTI Consulting was brought in to carry out a two-phase effort, first to conduct an analysis of the current state of the AML CRR tool and then to improve it. The assessment involved interviews with key stakeholders, understanding the business and risks, and a review of policies and procedures to ensure compliance with regulatory guidelines. FTI Consulting provided the bank with an updated AML CRR tool with improved functionality, which incorporated the team’s risk factor recommendations. Additionally, FTI Consulting provided updated and improved audit log procedures, methodologies and documentation.
• Cyber ​​Security Program Evaluation: FTI Consulting performed an independent assessment of the bank’s cybersecurity program (including its security architecture, policies and procedures), using industry best practices and frameworks. The client was provided with a final evaluation report with our approach, quantitative and qualitative findings and recommendations based on the information and documentation received, as well as the interviews carried out. FTI Consulting also assessed the bank’s dark web exposure and digital footprint to provide actionable feedback on potential areas of vulnerability.
• KYC increase: The FTI Consulting team was tasked with assisting the bank in improving Know Your Customer (“KYC”) processes for over 400 high and medium risk customers. This involved updating policies and procedures, using an advanced AML CRR tool, gathering missing information, and reviewing Customer Identification Program (“CIP”) and Customer Due Diligence (“CDD”) documentation. and Enhanced Due Diligence (“EDD”).
• Compliance testing resource support: FTI Consulting supported the bank by conducting second line of defense control tests for the bank’s IT security controls (incident management, cyber, threat, access, asset and configuration management, resilience, endpoint security, hardware security modules [“HSM”] operations, etc.). FTI Consulting has produced working documents highlighting field work, as well as summary reports describing findings, identified issues and recommended remedial activities.

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