Diego Rosero: Best Practices for MSBs—The First of Its Kind

Diego Rosero

ACAMS Today chatted with Diego Rosero, one of the authors of the recently published “Best Practices for US Money Services Businesses,” a guide of industry best practices for Money Services Businesses (MSBs) that was seven years in the making, and it is now available for download.

The “Best Practices for US Money Services Businesses” was published by the Electronic Transactions Association (ETA), INFiN—a Financial Services Alliance, the Money Services Business Association (MSBA) and The Money Services Round Table (TMSRT). These industry best practices are designed to assist MSBs with developing a compliance program to meet anti-money laundering (AML) requirements established by the Financial Crimes Enforcement Network (FinCEN).

Rosero recently joined Gemini as principal, compliance for its non-fungible token (NFT) marketplace: Nifty Gateway. Most recently, Rosero served as global suspicious activity report (SAR) control officer and director of Strategic Partnerships at Western Union. Prior to joining Western Union in 2017, Rosero served as a senior Policy Advisor and manager of the Financial Institution Advisory Program at FinCEN. Concurrently, Rosero also served as the US Treasury Department’s detailee to the Presidential Commission on Enhancing National Cybersecurity. Before joining FinCEN in 2012, Rosero worked in the banking and MSB industries in Miami, Florida, where he worked to deploy transaction monitoring systems, implemented AML programs and managed financial investigations.

ACAMS Today (AT): Laws, regulations and relevant guidance for MSBs have been established by FinCEN. What prompted the creation of the best practices guide for MSBs that you are presenting today?

Diego Rosero (DR): The “Best Practices for US Money Services Businesses” was created to strengthen the financial services industry by providing a blueprint to an effective AML program. We wanted to step up and guide the industry toward responsible innovation by recognizing the evolution in financial payments, which need to protect consumers and comply with regulations.

In addition, the “Best Practices for US Money Services Businesses” can help banks and MSBs alike, to prevent and manage de-risking. Banks are not defacto regulators of any MSB, yet they are expected to manage the risk associated with MSB accounts. But banks are not responsible for executing an MSB’s compliance program. In this regard, banks and other financial institutions can feel confident in engaging in relationships with MSBs that utilize these best practices because they are the leading AML standards of the financial payments industry. Further, banks and other financial institutions can utilize these best practices to address the regulatory expectations of their examiners as well.

AT: Were there specific events that necessitated the development of these guidelines? If so, what were they?

DR: The U.S. AML regime is complex, rigorous and fragmented. If one steps back and looks at the financial payments market broadly, fintechs and cryptocurrency exchanges entering the market, just like small check cashers and even more established MSBs, face many challenges when trying to meet their regulatory obligations. The “Best Practices for US Money Services Businesses” consolidates many of these regulations and provide best-in-industry principles to assist any MSB in establishing an effective AML program (the right way).

AT: What are the challenges that MSBs face regarding AML compliance that traditional financial institutions do not?

DR: Anybody can have a compliance program, but how do you know if the program you have is appropriate for your business?

MSBs face multiple compliance examinations annually from state and federal regulators while banks usually have much fewer examinations—and that is just one difference between MSBs and banks. MSBs are under a lot of scrutiny and the “Best Practices for US Money Services Businesses” can enable them to demonstrate that they understand what they are doing and that they have a best-in-class approach to AML compliance.

AT: How can this guide help MSBs develop a solid compliance program?

DR: The financial payments industry is very diverse and sophisticated. These best practices can help Bank Secrecy Act (BSA) Officers answer questions such as, “what do my peers’ AML programs look like, how do I execute a strong AML program, and what aspects make an effective program?”

These best practices not only articulate the AML requirements that financial firms should be meeting, they also take things further by presenting best-in-industry approaches to running an effective AML program.

AT: What would you highlight as a particularly important practice(s) that this document offers?

DR: One of the things that I think is really valuable about the “Best Practices for US Money Services Businesses”—in addition to helping chart each AML requirement—is that in almost every section there is a description of which AML strategies a small, medium, or large sized MSB should consider implementing based on their businesses model. While these best practices are not designed to be exhaustive, they are devised to help BSA officers evaluate their business risks and figure out the right regulatory approach for their program.

AT: Who can benefit from this guide?

DR: Fintechs, money remitters, virtual currency exchangers, check cashers, prepaid access providers and other institutions. But as much as these best practices will help MSBs, they are also going to help the banking sector as well.

One of the reasons we worked with the MSB trade organizations to put this document together was to provide MSBs with the right tools. If an MSB can say “I am meeting these best practices,” that should give their banking partners a great deal of comfort in providing banking services to the MSB.

AT: Any parting words of wisdom or advice you would like to share with the ACAMS’ membership?

DR: The “Best Practices for US Money Services Businesses” is proof of the continuous improvement and evolution of the financial payments industry. If ACAMS members want to know what the payments industry is doing and where the industry is heading, these best practices will answer those questions.

We are all committed to protecting our customers and the US financial system, and these best practices provide the industry with the tools to reach those goals.

Interviewed by: Monica Mendez, CAMS, senior international editor, ACAMS, Florida, USA, mmendez@acams.org

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