What Can Outsourced Compliance Do For BSA/AML and OFAC Programs?

As regulatory expectations continue to evolve and enforcement scrutiny intensifies, financial institutions are under increasing pressure to maintain robust and adaptable BSA/AML and OFAC compliance programs. In this complex environment, many institutions are turning to outsourced compliance solutions as a strategic way to manage risk, meet regulatory obligations, and enhance operational efficiency. Outsourcing elements of a compliance program—whether for short-term support or long-term partnership—can provide access to specialized expertise, scalable resources, and fresh perspectives that may not be readily available in-house.

In this article, we explore a few scenarios in which outsourced compliance support could make a measurable difference for your organization.

Scenario 1

You and your partners have created a new company in the financial services industry. You are either regulated under the BSA or your regulated bank partners want you to have a BSA/AML and OFAC Compliance Program. Or maybe you can’t get the kind of bank partner you want without a fully developed Program. You are a businessperson, focusing on building your operations and getting customers.

What can Outsourced Compliance do for you? A BSA/AML and OFAC Compliance Program is built based on a complex group of laws, regulations, and regulatory guidance that requires direct experience with how they all come together to form a Program that operates cohesively and effectively. Outsourced Compliance consultants are experienced advisors who have built and run Programs for their own employers and for other companies. They know what it takes to work with banks and other regulated partners within the financial services ecosystem. In the above scenario, a CEO may consider employing Outsourced Compliance to draft the Program, Risk Assessment, Procedures and help select vendors for controls such as transaction monitoring, OFAC monitoring, and Know Your Customer (“KYC”) verifications. They may consider hiring a temporary Compliance Officer who can manage compliance internally as well as with external stakeholders such as examiners, bank partners, and other third parties. An Outsourced Compliance Officer (“OCO”) can also provide initial and on-going training and ensure that the independent review occurs as required.

Scenario 2

You are regulated under the BSA, and your Compliance Officer leaves the company a few weeks before you are scheduled for an examination.

What can Outsourced Compliance do for you? An Outsourced Compliance Officer can successfully get you through your examination. The OCO can review and facilitate the production of documents and information, prepare management and stakeholders for what to expect, and manage exam meetings and demonstrations. Once a new Compliance Officer is either hired or identified within the Company, the OCO can provide job training and transition the role.

Scenario 3

You know that your bank partner relies on you to Know Your Customer (“KYC”) but there is little regulatory guidance as to the best method for getting that done.

What can Outsourced Compliance do for you? Outsourced Compliance personnel are familiar with the best practices for KYC at various levels, such as standard and enhanced KYC. They can provide a methodology to risk rate customers and develop standards for multiple stages of KYC depending on risk.

Scenario 4

Your Company’s underwriting process is excellent at collecting initial KYC, but you don’t have the resources to maintain the risk-based periodic reviews that need to be done.

What can Outsourced Compliance do for you? Outsourced Compliance can run your periodic review program. If you don’t have a periodic review program, they can create one based on the types of products, services, locations, and other factors that determine the frequence and intensity of the reviews.

Scenario 5

AML is all about mitigating risks associated with money laundering, terrorist financing, and OFAC violations. You have an initial risk assessment, but that was put in place a couple of years ago. The Compliance Officer has tweaked the Risk Assessment as required by your Program, but did not change or add to the risk categories. There has not been time to thoroughly analyze the actual AML and OFAC risks based on company history, changes to products/services, personnel changes and more.

What can Outsourced Compliance do for you? Outsourced Compliance will take your Risk Assessment to the next level. Risks are often identified through testing and gap analysis, often revealing surprises that need to be addressed.  A good Risk Assessment is the driver for an effective AML Program.

Scenario 6

Your transaction monitoring system (“TMS”) was put in place years ago. You are getting too many hits and ignoring many of them as “normal activity” or putting these hits in a back-log queue. Or the opposite is happening. Your TMS has not identified unusual transactions, even though your systems were used for fraud.

What can Outsourced Compliance do for you? It is time for an end-to-end system audit to determine what is hitting (or not hitting) and why. Further analysis will determine how to reduce the number of hits while effectively identifying the activity that needs immediate attention. This type of audit works for the OFAC monitoring system as well, where settings, rules, and sources of data should be analyzed and Outsourced Compliance can recommend a number of ways to streamline and improve the system.

Scenario 7

You bought an off-the-shelf AML training service that you are unable to modify or customize.

What can Outsourced Compliance do for you? They can work with your current vendor to customize the training for your company’s Program. Hopefully at some point, they can be your new training vendor for on-going and customized training.

Scenario 8

You work with a number of Agents, gateways, or other third parties to provide your services. You know you need a good oversight program but don’t have the staff.

What can Outsourced Compliance do for you? Outsourced Compliance can create and implement an oversight program that is based on risk and is ongoing.

Outsourced compliance support isn’t just for organizations in crisis—it’s a flexible, strategic tool for companies at all stages of growth and development. Whether you’re launching a new venture, navigating staffing transitions, preparing for regulatory exams, or simply seeking to optimize existing operations, working with experienced external advisors can provide clarity, confidence, and compliance continuity. With the right support, your BSA/AML and OFAC Program can evolve into a proactive, risk-responsive framework that drives both compliance success and business value.

Contact Bates Group today to learn more about our Outsourced Compliance services, including interim or board-approved OCO roles, onboarding and screening assistance, transaction monitoring support, regulatory reporting, and strategic risk guidance. We’re here to help your team stay efficient, informed, and compliant every step of the way.