Risk assessment is the systematic evaluation conducted by Finsive consultants to identify your institution’s inherent Money Laundering (ML), Terrorist Financing (TF) and Proliferation Financing (PF) risks.
Risk assessments are integral to thedevelopment and implementation of your institution’s effective risk-based compliance programs. Institutional risk assessment comprises evaluation of the following risk factors;
Risk can vary based on the types of customers your institution deals with. This might include individuals, businesses, government entities, or other financial institutions.
High-risk customers may include politically exposed persons (PEPs), entities from high-risk jurisdictions, customers with complex ownership structures, or those with a history of suspicious activity.
Different products and services offered by your institution may carry varying levels of risk. For example, complex financial products, high-value transactions, or products with limited transparency may pose higher risks.
Some products or services may also be more susceptible to abuse for Money Laundering (ML), Terrorist Financing (TF), or Proliferation Financing (PF) purposes.
The geographical location of your institution and its customers can significantly impact risk. This includes both the domicile of your institution and the jurisdictions where you conduct business.
Institutions operating in jurisdictions known for weak regulatory oversight, high levels of corruption, or significant criminal activity may face elevated risks.
The channels through which transactions are conducted, such as online banking, mobile apps, ATMs, or traditional brick-and-mortar branches, can affect risk.
Online and mobile channels may pose increased risks due to the potential for remote and anonymous transactions, while physical branches may face different risks related to face-to-face interactions.
Depending on the sector in which your institution operates, there may be additional risk factors to consider. The nature, size and complexity of your firm may also affect your risk exposure.
These risk factors collectively contribute to your institution's inherent risk profile, which serves as the foundation for developing risk management strategies and implementing appropriate controls. By conducting a comprehensive risk assessment across these dimensions, your organisation can better understand and address the risks you face, ultimately strengthening your resilience and compliance with regulatory requirements.