FINTRAC Compliance for Canadian MSBs and Fintechs
FINTRAC requires reporting entities to maintain compliance programs with appointed officers, risk assessments, training, and effectiveness reviews. We provide compliance officer coverage and FINTRAC-aligned AML frameworks that satisfy regulatory expectations and banking due diligence requirements.
FINTRAC compliance program requirements
Canadian reporting entities must establish and implement compliance programs under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. FINTRAC guidance outlines five essential program elements that all reporting entities must address.
Appointed compliance officer
Every reporting entity must appoint a compliance officer responsible for implementing the compliance program. This person must have sufficient authority to carry out their duties and access to all information necessary for program implementation. The compliance officer reports directly to senior management and is accountable for program effectiveness.
Written policies and procedures
The compliance program must include documented policies and procedures covering the entity’s approach to compliance. This includes risk assessment methodology, customer identification and verification procedures, record keeping requirements, reporting obligations for suspicious transactions, terrorist property, and large cash transactions, and compliance training programs.
Ongoing compliance training
Reporting entities must provide compliance training to all employees whose duties relate to compliance obligations. Training must occur when employees begin duties and on an ongoing basis. The entity must document training delivery, content, and assessment of whether employees understand their obligations.
Effectiveness review
The compliance program must be reviewed for effectiveness at least every two years. Many entities conduct annual reviews. The review assesses whether program elements are working as designed, identifies weaknesses or deficiencies, and recommends improvements. Reviews must be documented and findings must be reported to senior management.
Risk assessment
Entities must assess their money laundering and terrorist financing risks. The assessment covers inherent risks from products, clients, delivery channels, and geographic locations. It explains how risks are identified, assessed, and mitigated through controls. Risk assessments must be updated when circumstances change significantly.
These five elements form the foundation of FINTRAC compliance. Missing or inadequate implementation of any element represents a compliance deficiency.
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What Canadian banks require from MSBs
Canadian banks have paid significant fines for inadequate due diligence on MSB clients. As a result, they now apply strict onboarding standards and conduct ongoing monitoring of MSB accounts. To obtain and maintain banking relationships with Canadian banks, you must demonstrate:
- Named compliance officer - Documented appointment with qualifications, authority, and reporting line to senior management. Banks want to see that someone qualified is accountable
- Complete AML program - Policies and procedures addressing all FINTRAC requirements, tailored to your specific business model, products, and customer types.
- Current risk assessment - Up-to-date assessment covering your actual risks, not generic templates. Banks want to see that you understand and address your specific risk profile.
- Transaction monitoring evidence - Documented monitoring approach, recent alert investigation logs, and proof that you actively detect suspicious activity
- STR filing history - Evidence that you identify and report suspicious transactions appropriately. Banks become concerned if you've never filed STRs despite serving high-risk customers or processing significant transaction volumes.
- Training documentation - Records showing what training you delivered, when, who attended, and how you assessed understanding.
- Effectiveness review results - Most recent review findings and management's response to identified issues.
- Regulatory good standing - Current FINTRAC registration, confirmation of no outstanding compliance violations, and evidence of cooperation with FINTRAC inquiries or examinations if any occurred.
Banks often request updated compliance documentation quarterly or when they conduct their own periodic reviews of MSB relationships. Evidence production is ongoing.
Common FINTRAC examination findings
When FINTRAC conducts examinations, they consistently identify certain deficiencies across reporting entities. Understanding these common findings helps you avoid them
- Inadequate risk assessment - Generic assessments that don't address the entity's specific business model, using template language without analysis of actual risks.
- Weak customer due diligence - Failing to collect required identification information, not verifying information properly, or not updating customer information when circumstances change.
- Insufficient transaction monitoring - No documented monitoring approach, monitoring that doesn't address the entity's risk profile, or failure to investigate unusual patterns
- Poor record keeping - Not maintaining required records, storing records in ways that prevent timely retrieval, or destroying records before required retention periods expire.
- Training gaps - No training for relevant employees, training that doesn't cover specific compliance obligations, or no assessment of whether employees understand material.
- No effectiveness review - Never conducting effectiveness reviews, conducting them less frequently than required, or producing reviews that don't actually assess program effectiveness.
- STR filing issues - Not filing STRs when required, filing without adequate investigation, or filing late relative to when suspicion arose.
Our service is designed to address these common deficiencies and produce the evidence that demonstrates effective program implementation
How fractional compliance officers work for Canadian MSBs
Many Canadian MSBs struggle with compliance officer costs. Hiring a qualified compliance professional full time is expensive, especially for smaller or growing businesses. However, FINTRAC requires an appointed officer, and banks won’t onboard you without demonstrating qualified compliance ownership.
Fractional compliance officer arrangements solve this problem. We serve as your appointed compliance officer, with documented authority and reporting lines. We fulfill all compliance officer responsibilities including program oversight, policy development, risk assessment, training delivery, effectiveness reviews, and coordination of suspicious transaction reporting.
The arrangement is common and accepted. FINTRAC does not require the compliance officer to be a full-time employee. What matters is that the officer has appropriate qualifications, sufficient authority to implement the program, access to necessary information, and accountability for program effectiveness.
We document the appointment clearly, establish reporting lines to your senior management or board, and maintain regular contact through scheduled reviews and on-demand availability. From FINTRAC’s perspective and from the bank’s perspective, you have a qualified compliance officer meeting regulatory expectations.
Fast path to audit readiness
If you need to become audit-ready quickly, we can deliver core program elements rapidly
- Week 1 - Scoping call to understand your business, conduct initial gap analysis, begin risk assessment, and document compliance officer appointment.
- Week 2 - Deliver draft policies and procedures, complete risk assessment, design transaction monitoring approach, and create training materials.
- Week 3 - Incorporate your feedback, deliver final policy documents, conduct initial training, and establish compliance calendar
- Week 4 - You have a documented program, appointed compliance officer, trained staff, and audit-ready evidence to show FINTRAC or banks
This timeline assumes you can provide complete information about your business during scoping and respond to questions quickly. Most Canadian MSBs can achieve audit readiness within one month using this approach.
Our general frequently asked question service
Our FAQ section provides quick answers to the most common questions so you can find the information you need instantly
Yes. We serve as appointed compliance officers for Canadian reporting entities. We document the appointment, establish authority and information access, and fulfill ongoing compliance officer responsibilities. This arrangement is common and aligns with FINTRAC requirements. The compliance officer does not need to be a full-time employee of the reporting entity
We coordinate your response to FINTRAC examinations. This includes compiling requested documentation, preparing management for interviews, explaining program elements to examiners, and addressing any findings. If FINTRAC identifies deficiencies, we implement corrective actions and document remediation. Many of our clients engage us specifically to prepare for or respond to FINTRAC examinations.
Not necessarily. If you operate multiple entities within a corporate group, one compliance officer can often serve all entities. We structure the appointment appropriately, document reporting lines for each entity, and ensure the officer has access to information across the group. FINTRAC focuses on whether each entity has adequate compliance oversight, not whether it's the same person across entities.
We conduct formal risk assessment updates annually, or more frequently if your business changes significantly. Updates occur when you launch new products, enter new markets, change customer segments, or experience events that affect your risk profile. Between formal updates, we monitor for risk changes and adjust controls as needed. This ensures your risk assessment remains current and supports compliance program effectiveness.
FINTRAC compliance without full time hiring costs
If you need a compliance officer for FINTRAC registration, audit preparation, or banking onboarding, we provide qualified coverage at transparent pricing.
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We provide named AML compliance officers and audit-ready policies for high-risk fintechs. Fixed monthly plans. Fast start. Built for firms that need to show evidence to banks, regulators, and auditors.