SHOULD COMMUNITY BANKS HIRE A FINANCIAL INTELLIGENCE OFFICER TO REDUCE MONEY LAUNDERING RISKS?

We have previously detailed how community banks, for a number of reasons*, are often targeted by professional money launderers. Now they need to start thinking about an effective solution. Given budgetary restraints, engaging a retired economic crime detective from your local police department, or hiring former US military intelligence officer, might be out of reach due to the fact that a six-figure salary would be necessary to attract qualified applicants.

Perhaps outsourcing your needs for an experienced analyst to perform an enhanced due diligence investigation might be appropriate. Community banks, unlike their national and regional cousins, don't have such questions arising each day, but when they do occur, a prompt analysis by a seasoned investigator is called for ASAP. It is humbly suggested that compliance directors at community banks look for suitable candidates who are already consultants in the financial industry. My first choices might include returned DEA Special Agents, due to the fact that their experience includes the investigation of drug trafficker money laundering; another possibility is a former US Army intelligence officer. or retired CID investigator.

Given that compliance officers at community banks live in an environment where service to the customer base is the number one priority, and their opinions about suspicious transactions, even if well-reasoned, might be trumped by management for client relations reasons, former police or military, whose no-nonsense demeanor and the fact that they are external subject matter experts could result in lowering risk when their opinions are accepted, rather than argued against by management. Consider engaging an outside financial crime consultant as part of your risk-based compliance program.
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*" See "Community Banks at Increased Risk from Money Launderers..." March 14, 2024, Kenneth Rijock's Financial Crime Blog. https://rijock.blogspot.com/2024/03/community-banks-at-increased-risk-from.html