BSA Model Validation – Are You Talking to Me?
Prior to 2011, there was no mention of the adequacy or deficiency of a BSA Model Validation in any examination report, audit report or enforcement action.

That year, the OCC and Federal Reserve issued guidance called “Supervisory Guidance on Model Risk Management,” and it has become ear-splittingly clear over the last five years that all banks, regardless of size or regulator, which use an automated transaction monitoring system, are expected to undergo an independent, periodic validation of their monitoring system to ensure it’s not “garbage in, garbage out.”

Banks now turn this validation task over to third parties without fully understanding what is expected by regulators and auditors, or how to properly scope and oversee the validation process.

Your bank needs to show your auditors and regulatory agencies that your transaction monitoring software accurately and comprehensively aggregates and monitors transactions of your customers, and performs as intended in detecting suspicious activity, as well as adequately risk rating, both at account opening and on an ongoing basis, the risks associated with the customer relationship and also at the account level.

There were numerous BSA enforcement actions in 2016, and a common theme was the deficiencies, or omissions, concerning banks’ model validation processes and the knowledge base of those responsible for overseeing such systems.

Most Compliance and BSA personnel deal with laws and regulations, rather than algorithms and quantitative analysis, and struggle with the concept of how to properly ensure the model is producing intended results – and whether to file a SAR or not.

This webinar will provide a level of knowledge that key bank personnel can use to oversee the validation process and ensure your bank meets regulatory and audit expectations.

Covered Topics

  • Data validation vs model validation and how they interact
  • Accuracy in risk rating/ranking of relationships and accounts
  • Validation engagement letter, scope, work-papers and final report
  • Independence considerations for in house model validations
  • Background and experience of internal or external personnel conducting validation
  • Ensuring that data collected and loaded into the monitoring software is accurate and comprehensive
  • Core, host and other systems that feed into the data stream
  • Corrective action follow-up to any identified deficiencies or gaps
  • Model data input, processing and reporting methodology and expectations
  • Impact upon SARs, CTRs, CDD and EDD
  • System utilization for initial Customer Risk Profile and ongoing monitoring; and
  • Differences in Rules Based vs Behavior Based parameters and efficiencies.


Compliance, Deposit Operations, Branch Administration or other departments that are responsible for reviewing alerts generated by a bank’s transaction monitoring system. Attendees also include BSA Officers, auditors and members of management with BSA oversight responsibilities.


Jack Holzknecht is the CEO of Compliance Resource, LLC. He has been delivering the word on lending compliance for 39 years. In 34 years as a trainer over 125,000 bankers (and many examiners) have participated in Jack’s live seminars and webinars. Jack’s career began in 1976 as a federal bank examiner. He later headed the product and education divisions of a regional consulting company. There he developed loan and deposit form systems and software. He also developed and presented training programs to bankers in 43 states. Jack has been an instructor at compliance schools presented by a number of state bankers associations. As a contractor he developed and delivered compliance training for the FDIC for ten years. He is a Certified Regulatory Compliance Manager and a member of the National Speakers Association.

Kelly M. Owsley, CRCM is Director of Training Services for Compliance Resource, LLC. Kelly’s career in banking began in 2000. Since then she has worked for financial institutions ranging in asset size from $250 million to $3 billion. Kelly has worked in numerous areas of the financial services industry including retail branch management, lending, product development and training. In addition, Kelly spent three years in a training and development role with CUNA Mutual Group servicing the largest credit union in the United States. Most recently, she served as the Vice President of Compliance, BSA Officer, and CRA Officer for a community bank in Kentucky where she was responsible for implementing and training all compliance related topics. Kelly holds a Bachelor of Science degree in Accounting from the University of Kentucky and is a Certified Regulatory Compliance Manager.

Credit Information

Institute of Certified Bankers: Visit http://www.icbmembers.org/login.aspx for instructions regarding self-reporting. Estimated credits: 2.5 CE Credits


  • Live Webinar which includes 5 Day On-Demand  - $265
  • Six Month On-Demand – $295
  • Live plus Six Month On-Demand – $365
  • CD-ROM & Hardcopy Handouts(Includes 6 Month On-Demand) – $345
  • Premier (Includes all options) – $395
  • Additional Locations – $75               


Online: Click here.

Phone: Call Total Training Solutions at (800) 831-0678

Register online up to day of event. Earlier registration allows time to check your computer for an optimal experience.