Trend Watching Across FinCEN’s Suspicious Activity Data

Trend Watching Across FinCEN’s Suspicious Activity Data
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This is the first post in a new series on Suspicious Activity Report trends Enigma will produce in an effort to make valuable shared insights between private and public institutions more widely available.

Banks and other financial institutions (FIs) spent roughly $100 billion on compliance in 2016. According to a recent report by Accenture, most FIs anticipate that number will get bigger before it gets better. With teams devoting more time and resources to comply with federal regulations, the number of Suspicious Activity Report (SAR) filings is also on the rise. Fortunately, there’s a lot of valuable intel to be gleaned from this data. Enter, Enigma’s new SAR trends series.

In this first post, we’re diving into FinCEN’s publicly available data to highlight trends in SAR filings by institution and suspicious activity type.

Filings by institution type

For most types of financial institutions, the [expectation of] increased compliance spending is consistent with the trend in number of SAR filings. This is certainly true for depository institutions like banks. Money services businesses — ones that transmit or convert money — have also seen a jump in the number of filings since 2016, potentially tied to the rising popularity of cryptocurrencies, among other possible reasons.

Filings Over Time 01

Among the lower volume financial institutions, casinos have recently filed more SARs.

Low Vol Filings 01

With FinCEN’s publicly available data we are able to gain a rough picture of the world of SARs by looking at the count of filings across different types of financial institutions, types of suspicious activities and financial products reported for each, and geographies. While the data does not include the actual amount of money related to any particular filing, the filing institution’s role in the transaction, or any personally identifiable information about the subject of the SAR, we are still able to identify a number of trends by viewing the data holistically.

Most common suspicious activities

Depository Institution 01
Money Services Business Msb 01
Casino Card Club State Licensed Casino 01

Prior FinCEN reports on SAR data often grouped certain suspicious activities under a more broad umbrella (as was the case with “structuring”). They also pointed to new trends, such as elder financial exploitation, that emerged from analysis of the submitted narratives — and sometimes yielded new red flags or revised guidance on specific wording for future SAR narratives. The analysis in those reports provided insight into how FinCEN went about transforming the raw filings into the kind of financial intelligence valuable to law enforcement.

The new Enigma SAR Reports

Enigma will be producing regular reports that highlight trends and insights gleaned from FinCEN’s SAR filing data. Given some information isn’t publicly accessible, we won’t entirely replicate FinCEN’s quarterly reports. Rather, our goal is to provide new analysis that helps FIs unlock value from FinCEN’s repository of data. We’ll be investigating trends in locations and types of activity, product, and institution as the data comes in each quarter. Check back on the blog and subscribe to our newsletter to follow along.

Interested in seeing a certain type of analysis? Let us know.

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