although there is no written regulatory requirement for a financial institution to conduct a risk assessment, the expectations of having one are clear. controls can be graded on a scale with the following descriptors: for example, the risk for the financial institution that processes outgoing international wires for customers is an inherent risk. the financial institution has “strong” mitigating controls, so this lowers the inherent risk score of the product or service down from 3 points to 1 point.
these questions will need to be answered to understand the customer or member risk fully. if the institution has a history of violations, particularly repeat findings, the risk of the financial institution should be increased in the risk assessment. expert advisory consultants can partner with the financial institution to provide a risk assessment that evaluates and documents your aggregate risk profile and solidifies confidence in your bsa/aml program.
the first section of the ffiec manual is the bsa/aml risk assessment. keep in mind that risk assessments are not a one-size-fits-all solution because the manual stresses that the scope and depth of a risk assessment should be customized to your bank. ofac risk assessment – this is your assessment of the likelihood or risk of processing a transaction for a prohibited entity. the basic assessment methodology should start with identification of applicable risk attributes, documenting an understanding of inherent risk for each and analyzing the sufficiency of controls to mitigate risk.
be aware that examiners want to see your analysis; if you cannot quantify your assessment with data points, we suggest a narrative which explains your methodology and reasons for your assignment of a risk rating or conclusion. this is a great way to utilize tables or charts in your risk assessment. risk assessments serve as a snapshot of how you see your risk and a roadmap for enhancements; there should be some form of an overall risk exposure conclusion. if your bsa/aml risk assessment does not tell the story of your institution’s bsa risk profile, tca hopes this article provided some ideas to help the assessment continue to evolve. tca bsa consultants work with clients to prepare bsa/aml risk assessments or consult to prepare them for financial institutions.
it is our hope that this tool helps institutions more effectively assess and internally manage their bsa/aml risks and thus reduce some of the regulatory burden the bsa/aml risk assessment should provide a comprehensive analysis of the bank’s ml/tf and other illicit financial activity risks. documenting the bsa/aml risk view the ffiec bank secrecy act/anti-money laundering manual appendix i – risk assessment link to the bsa/aml compliance program page under the appendices, bsa risk assessment matrix, bsa risk assessment matrix, msb risk assessment template, bsa risk assessment tool, aml risk assessment template excel.
step one. document the bsa/aml risk assessment. documentation is one of the more critical aspects of performing a risk assessment. large number of noncustomer funds transfer transactions and payable upon proper identification (pupid) transactions. frequent fund transfers. a bsa/aml/ofac risk assessment template. this template should be modified to fit the unique needs to the financial institution., aml product risk assessment template, ffiec risk assessment template, ffiec bsa risk assessment, financial institution risk assessment template, aml risk assessment tool, ffiec risk assessment matrix, aml risk assessment pdf, aml risk assessment matrix, bsa risk rating customers, sample bank risk assessment.
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