AML/BSA Program Development: A 6‑Month Case Study

Release Paused. Panic Set In.

When the client’s payments feature was paused by a regulator, the room went quiet.

That moment forced a six-month focused push in AML/BSA Program Development to deliver launch-ready controls and clear the hold.

We rebuilt a usable compliance program quickly and with clearly assigned owners.

This case study shows the step-by-step playbook we used, practical artifacts you can reuse, and a one-page readiness checklist you can download or use.

Background: Who We Helped and Why It Mattered

The client was a small U.S. financial institution running a payments rail and a digital wallet across 12 states. Monthly active users were in the low tens of thousands. Revenue came mainly from interchange fees and subscriptions. Senior compliance leadership didn’t exist; compliance tasks landed on the COO and a junior analyst.

A state regulator flagged missing disclosures and weak transaction monitoring for high-value transfers. The regulator paused a feature release and asked for supporting documentation. The pause cost two months of development time and pushed deadlines. Budget limits and quarterly product goals meant the response had to be pragmatic and focused.

Baseline posture: informal controls, a scattered policy library, partial KYC intake, and no formal SAR triage. This pattern is common for growth-stage fintechs and matches FinCEN — BSA program expectations for a risk-based, documented AML/BSA program.

"We thought we were close. The regulator's pause showed us we needed an owner," the COO said.

Phase 1: Assess Gaps and Map Licenses

Step 1: Two-week rapid program gap assessment

We ran a two-week sprint that started with interviews and product flow mapping.

Deliverables: A document pull (policies, transaction samples, vendor contracts, audit notes), mapped product flows, and a one-page heat map. We benchmarked gaps against public guidance and model policy language. Use FinCEN’s program baseline to align scope and priority.  Quantify risk with simple metrics: number of high-risk flows, jurisdictions lacking coverage, and missing data fields in onboarding.

Quick example: One payment flow showed rapid 24-hour transfers tied to the same IP but different names: a high-risk flag that moved to “Immediate” on the heat map.

Why this matters: The heat map makes tradeoffs visible.

If you can point to the highest-exposure flows, you justify the first engineering and policy changes.

Step 2: Build a 50-state licensing plan

Create a 50-state spreadsheet with columns for license type, filing owner, estimated fees, and turnaround. Prioritize states by revenue impact and regulator scrutiny. Start with state regulator links via CSBS — state resources to avoid missed requirements.

Month 1 deliverable: Fractional CCO engagement launched and a prioritized 50-state roadmap with assigned owners and next action items. This prevents surprises later and gives procurement a clear ballpark for budgeting.

Practical format to use:

• State | License type | Filing owner | Est. fee | Turnaround | Priority
• Add a notes column for state-specific filing quirks.
• Color-code priority by revenue impact.

Step 3: Convert gaps into a 90-day roadmap

Turn findings into a prioritized 90-day action plan with milestones, owners, and SLAs for policies, tooling, and training. Map items to product sprints so engineering can plan around compliance gates in Jira. Include “quick wins” that reduce immediate exposure — for example, adding basic OFAC checks and retention schedules tied to existing Google Workspace storage.

Bold takeaway:  Focus on actions that remove immediate regulator concerns first, then build scalable monitoring.

Practical deliverables for a 90-day plan:

• Week 1–2: heat map, owners assigned, prioritized 50-state spreadsheet.
• Week 3–6: policy templates and interim controls for high-risk flows.
• Week 7–12: implement monitoring rules, training, and tabletop exercises.

Phase 2: Build Policies, Monitoring, and Workflows

Step 1: Draft clear AML/BSA policies and measures

Write targeted policies: Customer Due Diligence (CDD), SAR process, OFAC screening, and transaction-monitoring thresholds. Use plain-language passages from federal guidance and adapt them to your product. The CDD policy must align with the FinCEN — CDD Final Rule for beneficial ownership and identity verification.

Keep policies short and practical:

• Front-load the purpose and scope in one paragraph.
• Provide a two-step operational flow for analysts (intake → investigation).
• Add a technical annex for engineering with field-level requirements.

Include concrete examples and escalation flows so operations can act without needing legal to interpret. Tie document retention to existing systems like DocuSign and Google Workspace. Provide template language for executive summaries to present at regulator meetings.

Practical tip: Keep every policy under three pages for ops use; append technical annexes for auditors.

Step 2: Translate product flows into monitoring rules

Convert velocity checks, concentration rules, new-account checks, and geolocation anomalies into specific, testable alerts. Define triage ownership and SLAs. For example, initial analyst review within 24 hours for high-risk alerts. Document when an alert becomes a SAR candidate.

Translate this into a compact checklist for engineering:

• Event definition (what triggers an alert)
• Data fields required (customer ID, IP, device ID, timestamp)
• Initial triage owner and SLA
• Escalation path and SAR threshold

Sandbox validation first. Use open-source prototypes for proof-of-concept before purchasing production tooling; the FinAegis GitHub — core banking prototype is a valid developer test harness. For vendor discovery, browse curated RegTech directories to find modular providers.

Sample dashboard KPIs:

• alerts per 1,000 transactions
• time-to-first-review
• false-positive rate

Human vignette: An analyst flagged a sudden rise in 24-hour transfers from one IP. The templated alert captured required fields, triage happened within two hours, and the team closed the case with a well-documented SAR narrative in under a day. That workflow cut investigation time and produced audit-ready exports.

Step 3: Build an examiner-ready SAR process

Create a full SAR intake, investigation, and filing workflow with templates and decision trees. Produce artifacts auditors want: executive summaries, exportable data timelines, and proof of control testing. Use FinCEN — BSA E‑Filing system for actual SAR submissions and system requirements.

Key SAR artifacts:

• intake form with minimum data elements
• investigation checklist
• executive summary template for regulator meetings
• exportable timeline CSV for each case

Run a tabletop exercise and mock regulator interview. Link controls to testable steps so future monitoring shows evidence of effectiveness. Reference the FFIEC — BSA/AML manual when designing testing steps and examiner-facing artifacts. Add a vendor due-diligence checklist for third-party fintech integrations.

Human example: An analyst’s workflow moved from spreadsheet notes to a templated investigation that reduced SAR prep time by hours per case.

Phase 3: Implement, Train, Measure

Step 1: Phased rollout and engineering integration

Roll out in two waves: Blocking controls first (KYC verification, OFAC screening, hard caps), analytics second (fine-tuned thresholds, ML-assisted scoring). Put compliance checkpoints into Jira as acceptance criteria. Hold short, regular standups with product, engineering, and compliance to clear blockers fast.

Fractional CCO role during rollout: Weekly advisory, decision sign-off on ambiguous cases, and regulator point-of-contact. That single role reduced escalations and kept the release schedule intact.

Implementation checklist:

• Sprint 1: deploy KYC provider, OFAC checks, basic caps
• Sprint 2–3: instrument monitoring events, deploy sandbox rules
• Sprint 4: cutover to production rules with rollback plan

Step 2: Training and change adoption

Deliver a 90-minute role-based training for product, ops, and support. Publish quick-reference checklists in Slack and Notion. Run a few real-case simulations and then update policy language based on lessons learned. Measure adoption with quiz completion and a drop in policy-related escalations.

Training components:

• 20-minute product-focused session for engineers
• 30-minute ops walkthrough for analysts
• 40-minute tabletop with cross-functional stakeholders

Use ACAMS — practitioner resources for investigator training modules and real-case scenarios and seek or train CAMS certified analysts to execute the program.

Step 3: Report outcomes and link to business value

At six months, report concrete metrics: Release delays dropped from 60 days to 7 days on average for compliance holds; SAR filing timelines met expectations; two audit findings were closed; and monitoring tests passed. Produce an executive one-pager tying each roadmap deliverable to business outcomes.

Client quote: "Embedding senior compliance leadership made release decisions faster and more defensible," the COO noted.

Fractional CCO Timeline

• Month 1: engagement launched — 50-state license roadmap, gap heat map, and assigned owners.
• Month 2–3: policy templates delivered — CDD, SAR, OFAC, and monitoring rules. Weekly advisory calls.
• Month 4–6: implementation support — Jira checkpoints, training, mock exam, and examiner-ready binder. Ongoing retainer options for monitoring and testing.

These are concrete deliverables, not buzzwords. The timeline maps to specific outcomes: filings made, policies produced, and audits closed.

Conclusion — The Practical Lesson and Next Step

Embed senior compliance leadership early to make compliance predictable, not obstructive.

Start with a two-week sprint: build a heat map, assign owners, and create a short 90-day action plan.

If you want the checklist that guided this project, download the FFIEC-aligned one-page AML/BSA readiness checklist For checklist reference, see the FFIEC manual landing page.

FAQs

Q: What are essential AML/BSA controls for small institutions?
A: CDD/KYC, transaction monitoring, a documented SAR process, OFAC screening, written policies, staff training, and periodic independent testing. Use FinCEN and FFIEC guidance as structure.

Q: How long to build a launch-ready program?
A: In this case, six months. Faster if you limit scope, buy tooling, and have clean data. Longer if you need broad 50-state filings or major engineering work.

Q: Can a fractional CCO deliver examiner credibility?
A: Yes. Senior practitioners who produce documented deliverables, meeting minutes, and examiner-ready artifacts improve credibility.

Q: Low-cost monitoring options?
A: Validate rules in a sandbox using open-source prototypes before buying production tooling. Use regtech directories to find modular vendors.

Q: How to prioritize 50-state licensing?
A: Use a risk matrix: revenue impact, customer footprint, and regulator activity. Start where you have significant customers or where exam activity is high. CSBS is a practical research hub.

Q: When to hire full-time versus staying fractional?
A: Move to a full-time hire when compliance work exceeds about 24 hours per month of senior-level decision-making, when facing sustained regulator engagement, or during M&A activity.

Q: How to prepare for an exam with limited resources?
A: Build an examiner-ready binder: policies, control tests, SAR narratives, and data exports. Run tabletop exercises and file test SARs using FinCEN’s portal. Use FFIEC appendices for risk assessment templates.