Recently, our CAMS consultants have notice an up-rise in examiners requesting BSA/AML Risk Assessment Reviews from our customers. Although a risk assessment is nothing new, the rules and regulations are, and a risk assessment allows a financial institution to establish a more comprehensive Anti-Money Laundering (AML) Compliance Program.

WHAT IS A BSA/AML RISK ASSESSMENT?

By definition, a BSA/AML Risk Assessment Review is, “the identification, evaluation, and estimation of the levels of risks involved in a situation, their comparison against benchmarks or standards and their determination of an acceptable level of risk,” according to The Business Dictionary.

In other words, a BSA/AML Risk Assessment Review evaluates the institutions risk exposure and will allow the institution to develop the necessary policies, procedures, systems, and controls to mitigate any exposure to risk.

RISK CATEGORIES

While there is no standard manual on how a consultant should analyze an institutions risk level, all reviews should inspect the following risk categories:

• Customer Profiles
• Product Offerings
• Geographic Locations
• Operational Processes

Customer Profiles

Identifying customers that pose an increased risk due to transaction types and or volume.

Product Offerings

Uncover any inherent risks associated with each product and service.

Geographic Location

Monitor any significant volume of transactions with “high” risk geographic locations, specifically in High Intensity Financial Crime Areas (HIFCA) and High Intensity Drug Trafficking Areas (HIDTA).

Operational Processes

Determine the effectiveness of internal controls in detecting and preventing products and services being used for money laundering and or terrorist financing.

WHY DO YOU NEED A BSA/AML RISK ASSESSMENT REVIEW?

A BSA/AML program must commensurate with risk and in order to do so, you need a risk assessment. Regulators, examiners and bankers expect financial service institutions to conduct an in-depth review of all areas of the organization as part of their risk management.  

The review takes into account all risk factors as they relate to financial services and produces data that will uncover exposure to different types of risk. In some cases, a financial institution might already be taking some precautions to protect their business, but the BSA/AML Risk Assessment Review will help uncover any areas that might have been overlooked.

The BSA/AML Risk Assessment will allow you to have a better understanding of your overall risk. A risk assessment should be comprehensive and well documented. When complete, an effective risk assessment should enable the financial institution to establish policies, procedures, and internal controls to develop the company’s BSA/AML Compliance Program.  

If you would like assistance with your BSA/AML Risk Assessment Review, contact us.

(858) 922-4325

info@CapitalComplianceExperts.com

Tags: Anti Money Laundering, Bank Secrecy Act, BSA/AML Programs, BSA/AML Risk Assessment Review, CAMS, Capital Compliance Experts, Custom Anti-Money Laundering Programs, Financial Services, mitigate risk, Risk Assessment