FinCEN’s Whistleblower Program is now operational, significantly changing the AML and sanctions risk landscape for banks. With substantial financial incentives for individuals reporting BSA/AML violations that lead to enforcement actions, institutions must acknowledge that control gaps, cultural weaknesses, or governance breakdowns may be exposed externally.
What You Should Be Doing
Executives and compliance officers should evaluate their operational preparedness. Here are practical steps banks should implement now:
Elevate Compliance Culture from the Top
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- Board and CEO messaging that reinforces zero tolerance for AML/BSA violations and retaliation.
- Regular Board reporting on internal complaints, investigation themes, and remediation trends.
- Incorporating ethical escalation into management performance metrics.
- Conducting anonymous employee surveys to measure confidence in reporting channels.
- A strong culture encourages employees to escalate internally first.
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Strengthen Whistleblower & Anti-Retaliation Frameworks
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- Conduct an independent review of whistleblower policies against current enforcement expectations.
- Establish multiple reporting channels (anonymous hotline, web portal, direct Audit Committee access).
- Implement documented retaliation monitoring procedures.
- Define SLAs for intake, triage, investigation, and resolution.
- Establish credibility through process discipline.
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Proactively Test AML/BSA Controls
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- Conduct targeted lookbacks in high-risk portfolios (MSBs, fintechs, high-risk jurisdictions).
- Perform mock regulatory exams and independent AML stress testing.
- Review SAR decision governance.
- Validate sanctions screening tuning and alert suppression.
- Regulators may eventually see what your employees see.
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Train for the Intersection of Internal & External Reporting
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- Facilitate scenario-based escalation workshops.
- Provide clear guidance on confidentiality and documentation standards.
- Train managers on handling protected disclosures.
- Conduct tabletop exercises simulating whistleblower-driven enforcement.
- Preparation reduces reaction risk.
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FinCEN’s whistleblower program increases the likelihood that compliance weaknesses will become public enforcement matters. Institutions investing now in governance, control testing, and culture will be better positioned to manage regulatory and reputational exposure.
If your institution is assessing readiness, we are actively working with banks to conduct independent evaluations and targeted remediation planning.
About the Author
Partner, Financial Crimes Advisory
Jon Glass has more than 25 years’ experience managing and operating anti-money laundering (AML) compliance, fraud detection and security programs across multiple industries. He was previously a managing director and co-founder of Dominion Advisory Group, a U.S.-based AML advisory and financial crime consulting firm.
