Does anyone collect expected transaction activity for customer due diligence at account opening?

Yes we do.. and I think most banks are doing it now.

We provide a range of cash and wires -
e.g. $1,000 - $10,000
which they have to check off.

And then we ask if there will be foreign wires.
If yes, - to which countries.

We collect it on business accounts.
We ask about average balances, deposits & cash activity, wires, ACH, ATM. For wires and ATM we also ask about international activity.

We do not ask about ACH and ATM.

I cannot imagine that most people would be able to accurately predict that!

BSAdiva, - how has it worked for you?
Do you refer back to expected vs actual with ACH and ATM?

BSA Diva - have you gotten any resistance from Examiners? I do not risk rate my consumer accounts (unless their activity does not match their stated occupation) ...

my internal auditor is giving me a hard time.

MagicCity - we ask about ACH - but mainly if they conduct cross-border activity.

I encourage banks to collect basic due diligence information from everyone. If you have a trained sales staff, that information should be easily gathered as many of the questions are the ones that a trained sales person should be asking the new customer anyway in order to place them in the right product, cross-sell other products, etc.

If you have sales people not asking a new customer about their expected activity - they are not good sales people - it is just a matter of making it easy for them to document.

Incorporate it into your sales culture - this is not something that when a customer says: "why are you asking me these questions?", the sales rep. replies in a snippy voice that: "it's required by the Bank Secrecy Act".

If someone approaches and asks to open a checking account, the first thing the sales rep. should say is OK, we have several checking account products. Let me ask you a couple of very basic questions regarding your expected activity so that I can suggest the most appropriate and cost effective product to meet your needs. As far as occupation, etc., that is easily handled on the new account application.

As for the level of information, it should be a tiered approach. Review Appendix K in the examination manual for an example of the risk based approach that should be used for CDD and EDD information gathering.

We have a questionnaire that is incorporated into our new account opening process on the platform for business accounts - we ask similar questions as BSA Diva as well as questions to define whether or not they are an MSB (critical to us as we don't bank new MSB's) - such as what services they offer their customers - we then risk rate in the Compliance Department based off of their answers.

I agree 100% with rlcarey - it's all about the way the new accounts rep delivers the information request to the customer. The completed questionnaire actually prints out and the customer signs it along with their other opening paperwork -we trained our staff before rolling it out to remain positive when asking the questions and to also look for cross sell opportunities. This has worked well for the past two years. It really helps us in Compliance to have a baseline to work from on account activity expectations.

Magic - We just ask for estimates. If it's an established business, they're pretty accurate. For new businesses they often put what they hope will occur. We usually only go back and look at the info we collect if the customer hits one of our suspicious activity batches. On businesses our CIP worksheet is 2 pages plus signer sheets, so we get a lot of info up front.

Not as New - We risk rate all our customers, but the consumers are generally low risk unless they are NRA's, PEPs or have something that raises a flag when reviewing our CIP worksheet. Once the customers are in our database, I use our AML software to run quarterly risk ratings based on activity. As a result, all of our customers have a risk score. For some the score is zero because they have no activity that triggers "points". I've had no issues with examiners nor auditors on the way we handle our account opening and risk rating.

I am attempting to implement a form with all of the information mentioned above to be used at account opening. (Currently we're not collecting any info on expected transactions). I have suggested to our senior management that we present this to our customers as a tool we can use to serve them better, not an interrogation. However our CEO is very hesitant to do this. He does not believe that other banks are collecting this kind of information from their customers, and that we will drive people away if we try it. He also seems to think that this issue is "nebulous" with the regulators and that this is not a prominent issue for them. I have argued based on my personal experience with examiners, compliance education, etc, that I feel it is important to have these procedures in place before our next exam. Do any of you have input that would support either his position or mine?

Dragonfly - In addition to rlcareys points above, here is an overview from the FFIEC on Customer Due Diligence, which essentially says The concept of CDD begins with verifying the customer's identity and assessing the risks associated with that customer. Under customer risk it goes on to say Management should have a thorough understanding of the money laundering or terrorist financing risks of the bank's customer base. Under this approach, the bank should obtain information at account opening sufficient to develop an understanding of normal and expected activity for the customer's occupation or business operations.

Hope this helps - I have attached the link to the FFIEC Overview. If you need additional information, feel free to PM me.
http://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_013.htm

80's Lady,

Thanks a bunch for the link; that did help. Our management has decided that we will collect the expected transaction information, but only on customers we identify as high risk. That is contrary to my thought that we should be getting this info from everyone up front because that should factor into how we determine if they are indeed high risk. But we'll give this a try and find out shortly if it flies with the regulators...

We try to get estimates from businesses. Most are way off, esp. the newly created businesses. So we have garbage in/out. We have had better success using the rules in our software. We can ask for hits to customers whose average trans.balances differ by a percentage (say 200%) from prev. months. We look at those. They are blips and may give some indication that there is something new. If we used the actuals and compared them to the estimates we would be "working" most of the new accounts.

Our examiner made a point about CDD that I'll ass along. At the very least, if you have high rated accounts that are long standing, make sure you know what they are doing for income therse days. Rules bring up interesting info, we saw one cust. with lots of ACH compared to the past...after research we learned that he branched out into jukebox installs, etc. We coded him a watch account because his business profile changed. Do this for all accounts that you can - find the ones where their profile/product mix, etc. changed and flag these. At least do this as a first start. I have comm. lenders and others committed, through written procedures, that they must inform me when there is a change, esp. businesses.