U.S. Financial Institutions (FI's) are required to file a Currency Transaction Report (CTR) for each transaction in currency over $10,000. A transaction is any deposit, withdrawal, exchange, or other payment or transfer made by, through, or to the Financial Institution. These CTR's must then be filed with the Financial Crimes Enforcement Network (FinCEN).
CTR's are either filed for single transactions or for multiple transactions aggregated by a specific business date. There are various systems FI's can use to capture these currency transactions and perform "e-filing" of CTR's to the FinCEN. However, there are many challenges that can arise within the process.
Below are some of the key challenges faced by Financial Institution's when compiling CTR's:
- Usage of legacy data systems to track currency transactions
- Identifying and correlating multiple transactions at the initial point of data collection (for example Teller Line.)
- Identifying multiple parties who are involved in the CTR
- Frequent changes in the format of the CTR
- Aggregating multiple transactions to create the CTR
The most complex of these challenges is CTR aggregation. Single cash transactions exceeding $10,000 are easily detected and tracked, while multiple transactions are harder to identify and track. Additionally, since FinCEN does not provide defined guidelines for CTR aggregation, every FI follows different methods to aggregate transactions and create their CTR's.
What You Can Do
There are a few steps you may want to consider to help simplify your experience with CTR's such as:
- Upgrade overall data management capabilities and leverage new tools to capture and manage CTR data efficiently
- Retire legacy CTR systems and use new systems for CTR reporting and filing
- Improve "Know Your Customer" (KYC) processes
- Determine ways to efficiently collect the Beneficiary and Conductor’s information for each transaction
- Improve processes to identify non-customer cash transactions
- Use enhanced methods of identifying and aggregating on persons involved in the CTR
- Ensure that all systems that process transactions are accurately and completely sending required information to CTR reporting systems
How ACA Telavance Can Help
ACA Telavance is experienced in working with Financial Institutions to help:
- Validate various CTR systems and the processes involved during CTR reporting and filing
- Select, replace, or upgrade CTR systems cost-effectively
- Implement and test CTR solutions
- Review data integrity and mapping from various source systems to CTR systems
- Develop enhancements to all systems sending CTR related data to assure full compliance with regulatory mandates
- Document all sending systems to demonstrate adequate compliance to regulators
About the Author
Alekhya Andar is an Associate at ACA Telavance with over five years of experience in requirements gathering, analysis, testing, coding, and technical operations support. She joined ACA Telavance in February 2016 and is working with various financial institutions on data mapping, development (configurations) and testing of various AML solutions.
At ACA Telavance, Alekhya has been involved in documenting extensive test scripts and performing SIT of various Actimize solutions - CDD (Customer Due Diligence), SAM (Suspicious Monitoring), RCM (Risk Case Manager) and CTR (Currency Transaction Reporting). She is also involved in performing configurations of Actimize CDD and SAM modules. Alekhya also has experience with other AML solutions such as Prime Compliance Suite and Vertex (CTR reporting solution).
For More Information
For more information, please contact Mahesh Viswanathan at ACA Telavance or your regular ACA Telavance consultant.