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Five reasons why social media is an underutilized AML investigative tool

By: Naomi Glass, BSA/AML/OFAC Compliance Manager

About a year ago, I discussed embracing social media as a resource tool to aid in a credit union’s anti-money laundering (AML) compliance efforts. As a follow-up to that discussion, I would like to mention the top five reasons for the non-use of social media, as well as the importance of developing social media use policies and procedures. By becoming aware of the challenges to using social media, perhaps credit unions can make changes to overcome these challenges and take advantage of social media to boost their compliance efforts.

Five reasons for the non-use of social media

Popular social media platforms, such as Facebook, LinkedIn and Twitter, can be utilized by credit unions as an investigative tool to identify and vet individuals and businesses, determine connections between counterparties, and discover members’ criminal involvement. Despite these benefits, there are several reasons why social media is unused.

Reason 1: Lack of access

One of the primary reasons for the non-use of social media is AML staff’s inability to view it at work. This restriction is not uncommon in today’s workplace. Employers cite concerns over misuse by employees, lack of available network bandwidth, and cybersecurity risks as being the predominant factors in choosing to restrict employees’ access.

In the case of the latter, employers are fearful that granting employee access to social media could inevitably bring viruses and Trojan horses inside the network. Social media access could also increase the risk of hackers being able to infiltrate the organization’s IT infrastructure if vulnerabilities are detected and then exploited by cyber criminals.

Reason 2: Lack of knowledge

Even when social media access is granted to AML staff, many choose not to use it as an investigative resource due to lack of knowledge of how to effectively do so. Credit unions do not spend the time or money training AML staff on how to incorporate social media checks into their investigative process. This causes AML staff to have to “wing it,” which can be a deterrent to those with little personal experience utilizing social media. The ultimate result is inconsistent application by AML staff throughout the organization.

Reason 3: Lack of time

A third reason for the non-use of social media in investigations is due to lack of time. AML staff cannot spend countless hours researching members on social media (as much as they would love to!). Their burgeoning caseloads simply won’t allow it.

Reason 4: Lack of support from management

Along these same lines, management might not support the use of social media as an investigative tool if it causes a slowdown in production. Production slowdown could ultimately put the organization at risk of not meeting its SAR filing obligations in accordance with regulatory prescribed timeframes.

Reason 5: Lack of usefulness

Finally, some AML staff fail to leverage social media because they do not find the information useful. This could be due to concerns that the information gathered is not accurate or reliable.

Social media use policies and procedures: Questions and best practice tips

Because credit unions generally lack formal policies and procedures related to the utilization of social media for investigating suspicious money laundering and terrorist financing activity, they are at risk of falling behind the times. It would behoove credit unions to develop and adopt social media use policies and procedures that provide AML staff with a clear framework and understanding as to its permissibility and proper usage.

There are many factors management will need take into consideration when developing formal social media use policies and procedures. Below are three questions to consider along with some thoughts on best practices:

  • Should AML staff be permitted to utilize personal devices, such as smartphones and laptops, to conduct social media research if their access at work is restricted? While restricted use of social media in the workplace might be advisable for employees in general, I don’t think credit unions should restrict online access to employees serving in a BSA/AML compliance role. If AML employees were allowed to use company devices for social media, it would render the need to use personal devices for investigative purposes unnecessary.
  • Should AML staff utilize their personal social media accounts to conduct research? If so, are there certain privacy settings that must be put into effect first to ensure searches are conducted anonymously? Personally, I don’t think it is advisable for AML staff to be permitted to use their personal social media accounts for business-related purposes. Moreover, personal social media accounts with lax privacy settings in place could result in “tipping off” criminals to the fact that they are under investigation.
  • Should AML staff create fictitious social media profiles to utilize for investigative purposes? And, if so, what type of content is permitted, or not permitted, on a fictitious profile? I would indeed suggest creating fictitious profiles to conduct investigative research. This practice has been successfully used by law enforcement to catch criminals for years, so it would make sense to take a page out of law enforcement’s playbook. As far as content is concerned, I recommend that profiles contain minimal information and that privacy settings be set to the highest levels to facilitate anonymity.
Ultimately, it is up to the credit union to determine which policies and procedures best align with the needs and risk tolerance of the organization. What might be right for your credit union may not be right for another. The need to have conversations about leveraging social media as an investigative resource increases with every passing day since social media continues to dominate how members share information and connect with others.