Risk assessments are more than just a box to check off on your compliance “to do” list, they are the backbone for identifying existing hazards and preparing for potential threats. We like to tell institutions to think of your risk assessment as both your sword and your shield. It’s your sword because it helps you proactively address areas of risk, cutting through potential problems. It’s also your shield in that it helps you protect your institution by demonstrating sound risk management practices.
While most financial institutions already have a risk assessment in place for BSA/AML/CFT, the
proposed regulatory updates based on the 2020 AML Reform Act are seeking to require institutions to complete and continuously update their risk assessment. This emphasis on risk assessments goes to show just how critical they are to your overall BSA/AML/CFT program.
Kevin shared a few tips regarding risk assessments during our recent AML/CFT Membership Group meeting. Have a listen: