AML Risk Assessment
When it comes to AML compliance, the risk assessment is, by far, the most complicated component of an AML compliance regime. Many organizations struggle with AML risk assessments because of a number of reasons:
- There is no one-size-fits-all approach to an AML risk assessment.
- An AML risk assessment is not a one-time exercise, it evolves over time and requires ongoing maintenance.
- AML risk assessments require the use of a certain level of judgment.
- FINTRAC guidelines are designed conceptually to enable high-level of customization depending on the shape and size of each organization.
- There are many different ways to perform an AML risk assessment.
The most common approach to developing a risk assessment is to create a list of risks and rate each risk based on its significance and likelihood. This method, however, requires a strong understanding of AML risks that might be pertinent to your business strategy, products, and client base. FINTRAC guidelines suggest using a two stage risk assessment of your products, services, delivery channels, and geographic location. That being said, FINTRAC also clarifies that you have flexibility in terms of developing your own AML risk assessment methodology. FINTRAC states that the guidance provided is only a starting point and your AML risk assessment methodology has to be appropriate for your specific business needs.
Because of the high level of customization and judgment that is required for the development of an AML risk assessment, you may need professional assistance to ensure the accuracy and completeness of the desired outcome. Our proven methodology and easily customizable risk assessment templates can provide a solid starting point for your risk assessment efforts. Depending on the size and complexity of your operation, you can choose to conduct your own risk assessment based on our methodology or have us guide you throughout the complete development process.
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