The Bank Secrecy Act (BSA) is a U.S. federal law. The BSA requires financial institutions to proactively participate in the detection and prevention of money laundering. Under BSA regulations, banks and financial institutions are required to maintain detailed transaction records as well as to report suspicious activities and/or transactions — for example, large cash transactions and suspicious financial activities like patterns of regular, unexplained cash transactions — to the appropriate regulatory and legal authorities.
Use case/ examples of the Bank Secrecy Act (BSA)
Suspicious Activity Reporting (SAR): Filing mandatory reports when a transaction appears irregular or inconsistent with the typical behavior of a customer of that type, potentially signaling activity that could be money laundering, fraud, or terrorist financing. This might include frequent, high-value transfers with no discernable business purpose, or activity tied to sanctioned regions.
Cash Transaction Reporting (CTR): Reporting physical cash transactions (deposits or withdrawals) with a value over $10,000 in a single day, as required by the Bank Secrecy Act (BSA), to enhance financial transparency and deter illicit activity.
