Deposit validation control is applied to all product types oﬀered by the ﬁnancial institution.
Implementing a deposit validation control is critical to maintaining regulatory approval while operating a cannabis banking program.
Information collected during deposit validation drives risk-based decision-making across the institution.
On a monthly basis, an analyst downloads the customer’s transaction history from the core. The analyst requests track and trace transfer records, accounting reports, or POS readouts from the customer. The analyst uses a procedure to compare actual deposits conducted at the institution against the track and trace records, accounting reports, and POS readouts during the month. Analyst compares past deposit activity to current deposit activity to determine if aggregate activity matches sales records and expected activity. Some cannabis banking consultants supply coded Microsoft Excel spreadsheets to assist BSA personnel with reconciling large transactional volumes by hand.
Customer's track and trace system, accounting software, and POS is connected to the technology platform via application programming interface (API).Customer submits a deposit request through an online banking portal. Deposits are attached to package-level supply chain transactions or retail sales and checked against the customer's accounting entries. Funds enter the institution with a clear, downloadable audit trail that evidences the legitimacy of the deposit's source of funds. Risk factors extracted from the deposit validation control facilitate suspicious activity monitoring, accurate regulatory reporting (CTR/SAR),and customer risk proﬁle assessment. No manual procedure or on-staﬀ specialist is necessary to validate funds.
As leaders in the cannabis compliance marketplace, Simplifya, NatureTrak, and HDCS have formed an alliance.
By acquiring Copacetic Strategies, NatureTrak has expanded its offerings and expertise which includes risk mitigation and more.
Understand the complexities and risks of this sector as cannabis product moves through the supply chain to its final destination.
Jontae James is the founder and CEO of Sacramento-based NatureTrak, which works with financial institutions to create an auditable supply chain record for their legal cannabis business customers.