Which activity is a core component of BSA compliance programs?

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Multiple Choice

Which activity is a core component of BSA compliance programs?

Customer Due Diligence involves obtaining and verifying information about customers to understand who they are and what they do, so the bank can assess risk and monitor transactions. Under the BSA, financial institutions must implement risk-based CDD to know their customers, identify beneficial ownership where applicable, and monitor ongoing activity for suspicious behavior. This foundational activity enables effective AML controls, record-keeping, and reporting. Other activities like auditing tax returns, running marketing campaigns, or underwriting insurance do not directly establish the ongoing risk assessment and monitoring framework that BSA compliance relies on. They fall outside the core AML program components.

Customer Due Diligence involves obtaining and verifying information about customers to understand who they are and what they do, so the bank can assess risk and monitor transactions. Under the BSA, financial institutions must implement risk-based CDD to know their customers, identify beneficial ownership where applicable, and monitor ongoing activity for suspicious behavior. This foundational activity enables effective AML controls, record-keeping, and reporting.

Other activities like auditing tax returns, running marketing campaigns, or underwriting insurance do not directly establish the ongoing risk assessment and monitoring framework that BSA compliance relies on. They fall outside the core AML program components.

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