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The U.S. Treasury Department will provide financial institutions more “regulatory clarity” on how they can deploy artificial intelligence and other technologies to comply with the Bank Secrecy Act, a senior official said.

Ken Blanco, director of the department’s Financial Crimes Enforcement Network, said Tuesday the initiative will include “dedicated times” for banks, financial technology-services firms, or fintechs, and other institutions to discuss the “implications of their products, services and future applications” with bureau officials.

“FinCEN is open to industry pilot programs that seek to test and validate innovative approaches to combat money laundering and terrorist financing more effectively,” Blanco said at the ABA/ABA Financial Crimes Enforcement Conference in Maryland.

Blanco’s comments come a day after federal regulators said in a joint statement that financial institutions would not expose themselves to enforcement solely for trialing “innovative approaches” to BSA compliance, even if those efforts “ultimately prove unsuccessful.”

The Federal Reserve, Federal Deposit Insurance Corp., National Credit Union Administration, Office of the Comptroller of the Currency and FinCEN already have or will establish “projects or offices” to support innovation in the BSA space, they said.

The statement is the “natural extension” of work the OCC began two years ago by standing up an “office of innovation,” Spencer Doak, the agency’s BSA and anti-money laundering policy director, said during a separate panel at the conference Tuesday.

Through one-on-one meetings and other forums, OCC officials and representatives of banks, fintechs and other nonbank financial firms exchange ideas and feedback on the potential benefits and challenges of using AI and other new technologies for compliance purposes.

The initiative Blanco announced Tuesday comprises part of a broader effort by FinCEN to reform the BSA in partnership with federal banking agencies as well as independently.

Blanco told lawmakers in a Nov. 29 hearing that FinCEN plans to select a vendor to help determine the exact value of suspicious activity reports, currency transaction reports and other regulatory filings that financial institutions must submit.

The bureau is also working “with more than one institution” on testing proposals to streamline rules for filing SARs without impeding the flow of valuable financial intelligence to regulators and law enforcement, he said Tuesday.

“It’s not about complaining, it’s about coming up with ideas and solutions,” Blanco said. “In doing so, I ask that you please be realistic, and be able to explain how your proposal will keep our country and our communities safe and protect our financial system.”

Daniel Bethencourt contributed to this story