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How Long Does a SAR Take?
The Financial Crimes Enforcement Network believes it takes a bank, on average, 1.98 hours to file a suspicious activity report. Industry groups say those reports take much longer — more than 21 hours, according to a Bank Policy Institute survey of 15 large banks. BPI’s findings focus specifically on anti-money laundering SARs, and include time spent producing, reviewing and filing those documents.
Banks have filed suspicious activity reports for decades. In 1970, the Bank Secrecy Act put financial institutions on the front line in detecting illicit activity. As part of that obligation, banks must report cash transactions exceeding $10,000 or any suspicious activity, such as signs of money laundering or tax evasion. Coming up short on compliance can have serious ramifications, including stalling growth initiatives like M&A.
Regulators expect SARs to be “fulsome,” with as much detail as possible, says Thomas Delaney, a partner at the law firm Norton Rose Fulbright US LLP. FinCEN, which serves as the U.S. Treasury’s BSA/AML enforcement arm, also expects to receive a SAR in a timely manner — within 30 days.
That’s why understanding the required effort matters. The time to file an individual SAR can vary. Some can be quick and simple, but complicated transactions take more time, resources and staff. A SAR should contain an organized, complete narrative that summarizes the suspicious activity. An incident with a complicated chronology involving multiple parties, jurisdictions and a lengthy transaction history could take around 12 hours to put together, says Ashley Farrell, a director in the risk advisory practice at Baker Tilly. “It can become cumbersome,” she says.
Automation can make that task easier, she adds, but filing these reports remains a largely human task.
And smaller banks are experiencing more scrutiny from regulators these days, says Delaney. As larger banks beefed up their BSA/AML practices over the years, criminals shifted to smaller targets. “Those are financial institutions that don’t have the economies of scale of some of the larger banks. It’s important that the time they have to put in to comply with these various requirements, including the filing of SARs, is accurately reflected,” he says. “There’s not a full appreciation for the increasing regulatory burden that’s been put on [them].”
• Emily McCormick, vice president of editorial & research for Bank Director
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