NY investigators have flagged 'millions' of potentially illegal money laundering transactions - all at one bank
"What regulators have not done is actively tested the effectiveness of the filtering system banks are using," Lawsky said Wednesday during a speech at Columbia University. "That needs to change."
Lawsky is the New York State Superintendent for the Department of Financial Services.
Typically, the process - called automatic transaction monitoring and filtering systems - is left to banks themselves, who must self-report failure, Lawsky explained. After working with Navigant Consulting to inspect one bank's transaction monitoring processes, Lawsky is convinced the old process must change.
Millions of potentially illegal transactions flagged - all at one bank
After his speech, Lawsky told Business Insider that Navigant helped identify "millions" of potentially illegal transactions at one bank that needed to be red-flagged, and he said this was a sign that either his regulatory department or a nationwide regulator should step in with a service similar to Navigant's to better monitor big banks.
Navigant isn't the only potential partner for Lawsky and DFS; he cited Palantir Technologies as another potential partner for bank monitoring technology. Earlier, in his speech, Lawsky said that monitoring and compliance tactics including random audits and holding individual executives legally responsible for illegal transactions may been to be introduced to beef up banks' safeguards against fraud.
Lawsky declined to identify the bank he has already investigated, and Navigant did not respond when sought for comment.