Payroll providers are not banks—but they play a critical role in how money moves through the financial system. In this brief, practical overview, NEACH Payments Group explains why banks request AML and OFAC information from payroll companies, what they are required to understand about their customers’ customers, and how payroll providers can support those expectations without adopting bank‑level compliance programs.
The session explores how payroll processing can be exploited for illicit activity—including shell companies, fake employees, payroll diversion, rapid payroll spikes, and human trafficking—and why banks view payroll as a higher‑risk intermediary. It also outlines what banks are looking for in practice: visibility into customer risk, understanding of payroll fund flows, fraud awareness, OFAC considerations, and clear escalation processes when something doesn’t look right.
Attendees gain guidance on building right‑sized, risk‑based controls that align with payroll operations, avoid over‑engineering AML programs, and help maintain strong, reliable banking relationships.
Listen to the full recording to better understand your bank’s expectations—and how payroll providers can meet them while protecting their business and customers.