Case Studies
Citizens State Bank
ID Verification Success Story
“At Citizens State Bank, we completed a thorough
analysis of the various options available to us for PATRIOT Act Section 326,
314(a) and OFAC compliance. We found that using a documentary solution created
too much risk for our institution and decided to use an automated solution
to meet our regulatory obligations. After evaluating a variety of non-documentary
options, Citizens State Bank determined that eFunds’s ID Verification
solution provides the most comprehensive, cost-effective and easy-to-use
solution available in our industry.”
Mary Rinkenberger, Compliance Officer, Citizens State Bank
Overview
Citizen State Bank is an institution of more than 150 million located
in Roseau, Minnesota area. With a complete line of personal, business and
financial services, Citizens State Bank, and its Badger branch, works hard
to benefit every member of the communities it serves.
Challenges
With the enactment of the USA PATRIOT Act, Citizens State Bank faced
a difficult challenge of complying with the regulations while keeping costs
low, customer service levels high, and protecting the bank against the
increasing risk of identity fraud.
The goal of the management team at Citizens State Bank was to find
a reliable, comprehensive and efficient verification solution that would
be easy to implement as well as train employees. On the deposit side of the
business, checking documentary forms of identity was part of the current
process; however, the lending department was not checking any form of identification
before completing a new loan application. In addition, the bank needed to
determine a method of storing transactional records to make it possible to
review data for future customer analysis and regulatory compliance exams.
Solution
The compliance team at Citizens State Bank completed a thorough analysis
of the various options available to determine which verification solution
would work best within their organization.
Initially, Citizens State Bank planned to use a documentary
approach for USA PATRIOT Act compliance. This strategy requires that front-line
employees manually check and confirm identity information from prospective
customers. After researching the time and effort required to verify the truthfulness
of identity information and track transactions through a manual system, this
option was rejected. The bank found that the increased risk to the bottom
line and to the bank’s reputation was too great.
The bank then reviewed a variety of automated technology
solutions for compliance and determined that eFunds’s ID Verification
solution is the best available alternative. ID Verification allows the bank
to use one application to comply with all four requirements of Section 326,
as well as Section 314(a) and OFAC regulations. In addition, ID Verification
offers an extensive prevention program to protect the institution against
identity fraud. Using the broadest data available, frontline employees are
able to verify, within seconds, the identity of prospective customers and
check names against government watch lists. By understanding if a prospective
customer is “who they say they are”, Citizens State Bank is able
to comply with the regulations and reduce the threat that identity fraud
can cause to the institution’s bottom line, customers and reputation.
The record retention component of the ID Verification
solution is especially important to Citizens State Bank. The solution tracks
and manages all identity data records for the bank. Because the data is stored
in an easily searchable format, the bank compliance officers can confirm
that current policies are being adhered to by bank employees and then demonstrate
to examiners that the bank is complying with Section 326 and 314(A) of the
USA PATRIOT Act as well the OFAC regulations.
Not only is Citizens State Bank completely compliant
was USA PATRIOT Act Section 326, 314(a) and OFAC, but with ID Verification
as their identity verification tool, they have also gained other compelling
business advantages. By integrating with other bank systems like ChexSystems
and credit reports, the institution is able to streamline the verification
process and maximize efficiencies. Citizens State Bank is also able to keep
customer service levels high because administrators can easily deploy the
web-based solution and frontline employees are able to use the solution with
minimal training. eFunds’s ID Verification solution helps Citizens
State Bank to keep pace with their industry, deal with changes in their regulatory
obligations, and face the difficult issues of today’s world.
Benefits
- Completely Comply with the USA PATRIOT Act
Section 326, 314(a) and OFAC: ID Verification completely meets the
identity verification, government list screening, record retention,
and CIP documentation requirements.
- Reduce Employee Training Time and Costs: With ID
Verification, Citizens State Bank is assured of an easy to use solution
that employees can use almost immediately.
- Increase Operational Efficiency: By integrating
with other banking software, Citizens State Bank has one application to
use for a variety of new opening procedures.
- Reduce Identity Fraud: With identity theft
and fraud on the rise, Citizens State Bank has the assurance that they “know
their customer”
and can avoid issues involving fraud before they happen.
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