84 FR 25120 - FinCEN's Innovation Initiative: Implementation of FinCEN Innovation Hours; Invitation To Request Innovation Hours Meeting

FinCEN, a bureau of the Department of the Treasury, is notifying the public of its Innovation Hours Program. Through the Program, FinCEN will provide dedicated time on a monthly basis to meet with financial institutions, regulatory and financial technology firms, and other stakeholders to enable them to share information with FinCEN about innovative approaches to evaluating, maintaining and reporting information under the Bank Secrecy Act in order to further strengthen the financial system against illicit financial activity. The FinCEN Innovation Hours Program is a cornerstone of a broader FinCEN Innovation Initiative highlighted within the Joint FinCEN-Federal Banking Agency Statement on Innovation (December 3, 2018).\1\ The FinCEN Innovation Initiative seeks to promote innovation by supporting, where appropriate and feasible, innovation pilot programs, and enhanced feedback and information sharing programs. In addition, FinCEN will consider for future implementation the feasibility of incorporating demonstration and application testing capabilities to facilitate the development of innovative solutions to Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) challenges. ---------------------------------------------------------------------------

[Federal Register Volume 84, Number 104 (Thursday, May 30, 2019)]
[Notices]
[Pages 25120-25122]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2019-11314]


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DEPARTMENT OF THE TREASURY

Financial Crimes Enforcement Network


FinCEN's Innovation Initiative: Implementation of FinCEN 
Innovation Hours; Invitation To Request Innovation Hours Meeting

AGENCY: Financial Crimes Enforcement Network (``FinCEN''), U.S. 
Department of the Treasury.

ACTION: Notice.

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SUMMARY: FinCEN, a bureau of the Department of the Treasury, is 
notifying the public of its Innovation Hours Program. Through the 
Program, FinCEN will provide dedicated time on a monthly basis to meet 
with financial institutions, regulatory and financial technology firms, 
and other stakeholders to enable them to share information with FinCEN 
about innovative approaches to evaluating, maintaining and reporting 
information under the Bank Secrecy Act in order to further strengthen 
the financial system against illicit financial activity. The FinCEN 
Innovation Hours Program is a cornerstone of a broader FinCEN 
Innovation Initiative highlighted within the Joint FinCEN-Federal 
Banking Agency Statement on Innovation (December 3, 2018).\1\ The 
FinCEN Innovation Initiative seeks to promote innovation by supporting, 
where appropriate and feasible, innovation pilot programs, and enhanced 
feedback and information sharing programs. In addition, FinCEN will 
consider for future implementation the feasibility of incorporating 
demonstration and application testing capabilities to facilitate the 
development of innovative solutions to Anti-Money Laundering/Countering 
the Financing of Terrorism (AML/CFT) challenges.
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    \1\ See https://www.fincen.gov/news/news-releases/treasurys-fincen-and-federal-banking-agencies-issue-joint-statement-encouraging.
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    This notice will be in the Federal E-rulemaking Portal: http://www.regulations.gov. Refer to Docket Number FinCEN-2019-0001.

DATES: Effective Date: FinCEN Innovation Hours Program will begin 
effective May 30, 2019.

ADDRESSES: Stakeholders must submit meeting requests using the request 
form and questionnaire available on the Innovation Initiative web page 
[https://www.fincen.gov/resources/fincens-innovation-hours-program].

FOR FURTHER INFORMATION CONTACT: The FinCEN Resource Center at 800-767-
2825 or electronically at [email protected].

[[Page 25121]]


SUPPLEMENTARY INFORMATION:

I. Background

    FinCEN launched an Innovation Initiative to foster a better 
understanding of the opportunities and challenges of Bank Secrecy Act 
(BSA) and AML-related innovation in the financial services sector. 
FinCEN recognizes that private sector innovation, either by new ways of 
using existing tools or by adopting new technologies, has the potential 
to enhance financial institutions' BSA/AML compliance programs. This 
includes aspects involving risk identification, transaction monitoring, 
and suspicious activity reporting as well as otherwise improving the 
BSA/AML framework by making valuable information available to law 
enforcement. When responsibly employed, these enhancements can be an 
important element in safeguarding the U.S. financial system against an 
evolving array of threats. FinCEN's Innovation Initiative, highlighted 
within the Joint FinCEN-Federal Banking Agency Statement on Innovation 
(December 3, 2018), includes the FinCEN Innovation Hours Program, 
consideration of exceptive relief, where necessary and appropriate to 
facilitate innovative solutions to AML/CFT compliance challenges, and 
ongoing efforts to identify ways to enhance existing feedback and 
information sharing programs. FinCEN is considering plans to further 
expand this initiative in the longer-term by establishing demonstration 
and application testing capabilities for innovative AML/CFT solutions. 
FinCEN will also consider the feasibility of sponsoring ``Tech 
Sprints'' to facilitate the development of innovative solutions to AML/
CFT challenges in the longer-term.\2\
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    \2\ Tech Sprints are events hosted by government, private-
sector, and/or non-profit organizations or academic institutions 
that bring together representatives from all those sectors to 
collaboratively identify potential technological or other solutions 
to a particular problem or issue. FinCEN is considering the 
feasibility of hosting such events in the future that would focus on 
specific AML/CFT challenges or issues.
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    To continue to better understand regulatory and financial 
technology developments involving AML and CFT, FinCEN has met with 
financial institutions, technology companies, payments processors, 
regulators and other stakeholders focusing on innovation. A common 
theme emerging from these discussions is the desire by financial 
services stakeholders to have greater direct engagement with 
policymakers and regulators to discuss or demonstrate innovative 
financial products and services and compliance solutions. At the same 
time, industry engagement educates policymakers and regulators about 
new and emerging financial technology (``FinTech'') and regulatory 
technology (``RegTech'') business models and operating environments, as 
well as other innovative approaches to compliance. Such understanding 
helps to inform potential ways to improve the effectiveness and 
efficiency of the AML/CFT regulatory framework to make more valuable 
information to law enforcement and to better protect the U.S. financial 
system.

II. Innovation Hours

    To advance FinCEN's Innovation Initiative, FinCEN will host 
Innovation Hours for financial institutions, technology providers, and 
other firms involved in financial services to discuss and showcase 
their innovative products, services and approaches. FinCEN intends for 
this engagement to benefit both the private sector and government. 
Industry would share information about specific innovations and the 
potential opportunities and challenges. As part of the Innovation 
Hours, FinCEN will provide FinTech and RegTech companies, financial 
institutions and other stakeholders opportunities to demonstrate their 
new and emerging technologies and innovative products and services. 
Such demonstrations would be aimed primarily at educating FinCEN and 
other government participants about how the innovations operate and can 
enhance BSA/AML compliance to provide for more effective and efficient 
reporting and recordkeeping or otherwise improve the value of 
information collected and analyzed under the BSA framework.
    Innovation Hours will be held primarily at FinCEN offices in 
Washington, DC or Vienna, VA on a monthly basis, but they may also be 
conducted in other locations, as well as virtually, as appropriate. 
Innovation Hours will generally be scheduled for one hour per eligible 
requester. Depending on the demand or other factors, FinCEN may not be 
able to grant all requests. Those participating in Innovation Hours 
will not be compensated or reimbursed for their time, services, or 
travel.

A. Eligibility

    Unless otherwise authorized by FinCEN, to participate in the 
Innovation Hours Program, FinCEN requires at a minimum that:
    (i) The requester provide or use financial or regulatory products 
or services that comply with BSA regulations or are intended to enhance 
compliance with U.S. regulations.
    (ii) The presentation or demonstration address how such products or 
services, or innovative uses of existing tools, can enhance financial 
institutions' BSA/AML compliance programs, including, for example, 
aspects involving risk identification, transaction monitoring, and 
suspicious activity reporting or otherwise improve the effectiveness 
and efficiency of the AML/CFT framework to make more valuable 
information available to law enforcement to better protect the U.S. 
financial system.
    (iii) Products are in production or ready for deployment.
    (iv) The company is not the subject of an ongoing federal or other 
criminal or civil enforcement action for BSA/AML deficiencies.
    FinCEN does not generally anticipate accepting requests from 
entities whose innovations are in the conceptual or nascent stages of 
development. FinCEN will meet with consultants or legal service 
providers to eligible companies through the Innovation Hours Program 
only to the extent that such consultants or legal service providers are 
representing an entity otherwise eligible to request a meeting under 
the criteria listed above.

B. Limitations

    Discussions occurring in the context of the FinCEN Innovation Hours 
Program do not constitute a formal agency position and are non-binding 
on participants. Participation in the Innovation Hours Program does not 
constitute a U.S. government recommendation, endorsement, or approval 
of any company innovation, product, service or approach. In addition, 
FinCEN does not, and will not, through FinCEN's Innovation Initiative, 
approve, provide advice, or opine on:
    [cir] Any specific business model;
    [cir] What products or services a firm can or should provide; or
    [cir] How a company should structure their operations or compliance 
program.

C. Process for Requesting Innovation Hours

    Companies interested in seeking engagement with FinCEN through the 
Innovation Hours Program should complete and submit a request form and 
questionnaire as instructed on the Innovation Initiative web page 
located at [https://www.fincen.gov/resources/fincens-innovation-hours-program]. The request form and questionnaire requires participants to 
provide background information on the firm's business and the requested 
discussion topics. FinCEN

[[Page 25122]]

may, however, seek additional information as appropriate to enable an 
informed review of the request. Please note that contacting FinCEN to 
request a meeting will be viewed as a representation that your firm 
understands and will comply with the parameters for such engagement 
outlined in the Frequently Asked Questions published on the Innovation 
Initiative web page [https://www.fincen.gov/resources/fincens-innovation-hours-program/faq].

D. General Compliance Questions

    Although general compliance or other questions may come up during 
Innovation Hours, such questions should not be the purpose of the 
meeting. Companies with general questions regarding the BSA and its 
implementing regulations should contact the FinCEN Resource Center 
(FRC) at 1-800-767-2825 or [email protected].

Jamal El-Hindi,
Deputy Director, Financial Crimes Enforcement Network.
[FR Doc. 2019-11314 Filed 5-29-19; 8:45 am]
BILLING CODE 4810-02-P