BaaS compliance that re-performs every fintech partner's files and ties every partner ledger to its FBO account each day
Every fintech partner tested every quarter and tied out every day, with the evidence.
See one case, screen by screen ↓BaaS Compliance is how a sponsor bank tests its fintech partners' KYC, monitoring and SAR referrals against its own program. Agents re-perform a risk-based sample of each partner's end-customer files with the bank's own identity, OFAC and due-diligence sources, tie every partner ledger to its FBO account each business day and rebuild every end customer's balance, and draft cited findings. The Partner Oversight Analyst submits, the Third-Party Risk Manager concurs and the BSA Officer approves.
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BaaS compliance starts from an uncomfortable fact: a sponsor bank answers for every end customer its fintech partners onboard, but the onboarding happens in the partner's app, and the only ledger of who owns which dollar in the bank's for-benefit-of (FBO) account is often the partner's. Testing today means asking each partner for a list of new accounts, picking 25 to 60 files in a spreadsheet, requesting screenshots of the partner's identity-vendor results and ticking a checklist. Finance compares the partner's total with the FBO balance; a difference is emailed to the partner and often explained as timing.
The risk sits in what the bank never re-performs. A partner release that lets onboarding continue when an identity check times out leaves a hole in the bank's CIP program that no attestation shows. A ledger gap accepted as timing for weeks means the bank cannot say who owns the money: the 2024 failure of a banking-as-a-service middleware firm left end customers unable to reach their funds because records could not be reconciled. Referrals arrive late, a careless reply can tip a partner off about a SAR, and findings sit without an owner, a date or a closing test.
Estimated split for one partner program's quarterly test and its follow-up, by hand and with the solution. Not measured.
Seven agents re-perform partner files, tie out every ledger and draft the finding; the BSA Officer approves.
Tuesday, October 27, 2026. Tessaly Community Bank, a $3.4 billion community bank, sponsors 11 fintech partner programs with 214,000 end customers and $252.2 million in their FBO accounts. One of them, Fernquill Pay, has a problem nobody has told the bank about. Here is how the bank finds it, screen by screen, in the working solution.
Overnight the agents tied out 10 of 11 partner ledgers, re-performed 38 end-customer files and drafted one finding. Nine of 11 ledgers tie today: Fernquill Pay is short and Dunmere Earned Pay's ledger file is late, with a retry. The work queue is sorted by time left against each SLA, with filters, search and bulk assign and remind.
“Fernquill Pay's ledger is $22,790.75 above its FBO account. 4 items need you.”
Fernquill Pay is a consumer wallet and debit card program with 41,820 end customers and tier Elevated. On the left, the 60 files the agents re-performed this quarter, as squares in three strata: 20 high-risk applicants, 25 opened this quarter and 15 across the book. Four are red: files 8, 24, 31 and 39. On the right, the partner's ledger against Tessaly's FBO account, and under both, the drafted finding.
Jordan Pruett, opened October 6. Fernquill reported a pass on all seven tests: name, date of birth, address, Social Security number, OFAC screening at opening, purpose and expected activity, and risk rating. Re-run with Tessaly's identity service and OFAC list history, date of birth fails: Fernquill's own identity response shows the check queued after a timeout at 2:22 PM and never run. Aisha agrees it fails, or disagrees with a reason code the BSA Officer will see.
The re-performer never passes a file on the partner's word. Under 0.92 confidence, the analyst decides.
Three failures share one cause: Fernquill release 4.18, shipped September 30, lets onboarding continue when the identity service times out. So the agent tested every account opened October 1–26 instead of waiting for the next sample. 212 of 3,412 have the same gap, 31 of them high risk. The list opens in place with SSNs and dates of birth hidden, and exports for remediation item R-031-2.
“The full list goes to Fernquill only through remediation item R-031-2.”
Ines Halvorsen's file does not verify at all: the SSN ending 2290 is linked to a different date of birth in two sources. The agent referred it to Tessaly's own investigators as IR-2026-118. The referral stays in case management, and the partner is not told.
“Referred to Tessaly's investigators as IR-2026-118. Fernquill is not told.”
Fernquill's end-customer ledger shows $48,212,904.17; the FBO account ending 7720 holds $48,190,113.42. The $22,790.75 difference has been unexplained since October 14, nine tie-outs in a row, and escalated on October 15 and 19. The reconciler rebuilt all 41,820 balances: they add to Fernquill's total, so the gap is not inside the file. The break explainer found 23 debit-card funding reversals in settlement file CPS-1014 that add up to it exactly, with confidence 0.86, and that contradicts Fernquill's October 16 reply that it was timing.
“Accept as timing” is refused without a matching payment. Aisha asks Fernquill to confirm the 23, and the wording is checked before it goes.
Finding F-2026-031, severity High, reads like an examiner's finding: condition, criteria, cause and effect, each sentence cited to the CIP rule, the program agreement or the evidence. It proposes a pause on new high-risk applicants and four remediation items, each with an owner, a date and the test that closes it. Aisha asks why only high-risk applicants: 31 of the 212 were rated high risk, the possible synthetic identity came in that way, and about 130 low- and moderate-risk accounts a day keep opening.
Criteria: “The program agreement bars opening while a check is pending and requires the ledger to equal the FBO account, with differences cured within three business days.”
Aisha submits at 10:12 AM. Helena Strand, Third-Party Risk Manager, concurs at 10:26 AM and raises Fernquill to tier High. Graham Whitcombe, BSA Officer, did not draft, submit or concur, and approves at 10:41 AM. He can approve the proposed pause, a full pause that also needs the Chief Risk Officer, or no restriction with a reason.
“On approval: the hold goes to Fernquill's onboarding through the partner data feed, the notice goes to Tara Voss after the referral reviewer checks it, and 4 remediation items open.”
New high-risk applicants at Fernquill are held from 10:42 AM. Every gate shows its person and its time. Notice PN-FQ-1027 goes to Fernquill only after the referral reviewer checks that nothing in it reveals a SAR or a referral to investigators. R-031-1 and R-031-2 belong to Tara Voss at Fernquill; R-031-3, posting the 23 reversals, closes only after three daily tie-outs in a row at $0.00.
Every action is on the audit trail with who, what, when, why and the evidence, for people, agents and partners alike. Ruth builds the FDIC pack for Fernquill Pay: findings and approvals, the re-performed sample with every test cited, the daily tie-outs and rebuilt balances, partner messages, and agent versions and overrides. It comes to 186 pages and 64 files, with its SHA-256 recorded.
SAR decisions are excluded and stay in the sealed case, except in the BSA Officer's own pack.
The same partner program, seen by the five people who carry its oversight: what their quarter looked like, and what it looks like now.
Seven agents re-perform partner files, tie out every ledger and draft the finding; the BSA Officer approves.
Picks each quarter's end-customer files by risk: high-risk applicants, accounts opened in the quarter and a random draw across the book, weighted by the partner's tier and last findings. 660 files a quarter across 11 programs.
Re-runs the partner's identity, OFAC and due-diligence checks on each sampled file with the bank's own identity service and OFAC list history, cites each result, tests the whole population when failures share a cause, and refers signs of a synthetic identity to the bank's investigators.
Ties each partner's end-customer ledger to its FBO account every business day, rebuilds every end customer's balance from the partner's file, flags negatives and duplicates, and escalates an unexplained difference after one business day and again after three.
Investigates a difference older than one business day across the payments hub, card processor settlement files and general ledger, and proposes a cause with its evidence.
Checks each partner SAR referral for completeness and timeliness, opens it for the bank's investigators in case management, and checks every message to a partner for anything that reveals a SAR.
Drafts each finding as condition, criteria, cause and effect with citations, proposes the narrowest restriction that addresses the risk, and turns each recommendation into a remediation item with an owner, a date and a closing test.
Reminds owners, checks the evidence they upload and re-tests files after a fix, so an item closes on a test, not a promise. Escalates overdue items to the Third-Party Risk Manager, then the Chief Risk Officer.
Approves findings and restrictions; never one he drafted. The agents propose; a named person decides.
Ask in plain words, or say what to change. Every answer cites its source, and nothing reaches a partner until a named person approves it.
Why did four Fernquill files fail?
All four fail the same test: date of birth was never verified. Fernquill's identity response shows the check queued after a timeout and never run, which release 4.18 allowed from September 30. The re-performer then tested all 3,412 accounts opened since October 1 and found 212 with the same gap. One of the four does not verify at all and went to Tessaly's investigators.
Is Fernquill's $22,790.75 a timing difference?
No. A timing item needs a payment in flight, and there is none. The difference has been exactly $22,790.75 in nine tie-outs since October 14, and it matches 23 debit-card funding reversals in settlement file CPS-1014 to the cent. Fernquill said on October 16 it would clear by the 19th.
Which partners refer unusual activity late?
One this quarter: Merrowby Wallet's REF-MW-0412 arrived 9 business days after detection; the agreement allows 2. The other 26 arrived within one business day. It is already remediation item R-026-2.
Build the FDIC examiner pack for Fernquill Pay
Building it now: findings and approvals, the 60-file sample with every test cited, the daily tie-outs, partner messages, and agent versions and overrides. SAR decisions stay out, in the sealed case under the BSA Officer.
13 screens from the working solution, on its sample data. Pick one to see it large.
The sample sizes, tolerances, clocks and approval ladder are settings. Every change is proposed, and takes effect when the BSA Officer approves it.
| Setting | Default | Choose from |
|---|---|---|
| Files per program per quarter | 60 | The minimum under the bank's BSA/AML program; a top-up is a new plan for the BSA Officer |
| Sample weights for a High-tier partner | 40% high-risk applicants · 40% opened this quarter | The rest a random draw across the book, weighted by tier and open findings |
| Test the whole population when | 2 failures share a cause | Re-test after a fix: 20 files |
| Unexplained ledger difference allowed | $0.00 | Timing needs a matching payment: on · ledger file due 6:00 AM ET |
| Escalate an unexplained difference | After 1 business day, then 3 | Third-Party Risk Manager, then BSA Officer |
| Clocks | Partner referrals within 2 business days · findings submitted within 1 | Remediation escalates at 5 days, and to the Chief Risk Officer at 15 |
| Restriction ladder | Pause new high-risk applicants: BSA Officer | Pause all new accounts: BSA Officer and Chief Risk Officer · exit a program: Chief Risk Officer and board risk committee |
| Records and privacy | Files kept 5 years after the account closes · last four of SSN only | Need-to-know access under GLBA · legal hold · SAR decisions on partner-facing views locked off |
Every figure is labelled: a target the solution is built to, an estimate, a typical published result, or a proven one.
“demo” = seen in the working solution, on its sample data · “target” = the design goal, measured in the live solution · “estimated” = our estimate, with the split shown · “typical” = published rules (31 CFR 1020.320 on filing a SAR within 30 days of detection, 60 with no suspect, and on SAR confidentiality; 31 CFR 1020.220 on keeping CIP records five years after an account closes; the FDIC's proposed rule on recordkeeping for custodial accounts, RIN 3064-AG07, September 17, 2024, not final; the Interagency Guidance on Third-Party Relationships, 88 FR 37920, June 9, 2023). The bank, the fintech partners, the people, the end customers, the account numbers and every figure on the screens are fictional: characters and sample data in the working solution.
BaaS Compliance is how a sponsor bank tests its fintech partners' KYC, monitoring and SAR referrals against its own program. Agents re-perform a risk-based sample of each partner's end-customer files with the bank's own identity, OFAC and due-diligence sources, tie every partner ledger to its FBO account each business day and rebuild every end customer's balance, and draft cited findings. The Partner Oversight Analyst submits, the Third-Party Risk Manager concurs and the BSA Officer approves.
The bank's BSA/AML program covers every customer it serves through partners, including the CIP rule (31 CFR 1020.220), customer due diligence (31 CFR 1010.230) and SAR filing (31 CFR 1020.320). The 2023 interagency guidance on third-party relationships expects ongoing monitoring in line with risk, with the bank still responsible. The FDIC proposed daily reconciliation and end-customer recordkeeping for custodial accounts in September 2024; that rule is not final. The solution is set up around these rules; it does not certify compliance with them.
A for-benefit-of (FBO) account holds a fintech program's end-customer funds at the sponsor bank, while the partner's ledger records who owns which dollar. If the two drift apart, the bank cannot say what each end customer is owed. The ledger reconciler ties each partner ledger to its FBO account every business day and rebuilds every end customer's balance, so a difference is seen and explained the day it appears.
The sampling planner picks 60 files per program each quarter in three risk strata. The re-performer re-runs seven CIP and CDD checks on each with the bank's own identity service and OFAC list history as of the opening date, and says why a file fails, citing the partner's own record. When two failures share a cause, it tests the partner's whole population, as it did with 212 of 3,412 accounts in the sample case.
No. A partner sees only “Referral received” or “Review complete”, never a case number, the investigators' work or a filing decision, and that setting is locked off. The referral reviewer checks every message to a partner before it is sent; drafts that came close to revealing a SAR were held or rewritten.
No. The agents never approve a finding, restrict a partner, message a partner, net a ledger difference away or close a remediation item. The finding writer proposes the narrowest restriction; the BSA Officer chooses from the ladder, and a full onboarding stop also needs the Chief Risk Officer.
Yes. Every decision has a named maker and checker: the analyst submits, the Third-Party Risk Manager concurs and the BSA Officer approves, and the same person can never do two of those. Overriding an agent needs a reason code, and every step is on an audit trail that cannot be edited.
The Agentic Solution Engine builds and deploys it from your requirements and documents: your BSA/AML program, the partner program agreements, and sample partner files and ledgers. It goes live once every quality gate has passed. We will walk you through it on your own partner programs first.
Cited BSA answers in under a minute, with your own procedure beside the rule.
1-min demoAML Alert TriageEvery alert read like a short brief, challenged, then closed or escalated in minutes.
1-min demoAML Case ManagementCase files that build themselves, and every SAR call approved by a second investigator.
1-min demoWe'll run BaaS Compliance on a sample of your own partner files and a month of one partner's ledger.