A bank's AML program is under review by regulators. What should the bank demonstrate to show effectiveness?

While filing a high number of suspicious activity reports (SARs) may indicate that the bank is actively monitoring transactions, it does not necessarily reflect the effectiveness of the overall AML program. An excessive number of SARs could suggest inefficiencies in the monitoring system or an overly broad interpretation of suspicious activity, rather than a well-targeted risk-based approach.

Having a large compliance team does not inherently guarantee effectiveness in AML efforts. The size of the team is not as critical as the quality of the procedures implemented and whether they are aligned with the specific risks faced by the bank. A smaller, well-trained team can be more effective than a larger, less focused one.

While a low number of customer complaints might indicate smooth operations, it does not serve as a direct measure of AML program effectiveness. Customer satisfaction is important, but it does not assess the bank's ability to identify and mitigate money laundering risks or comply with regulatory requirements.