Actions that show crime assets as income from a legitimate source to hide the illegal source of money are called money laundering. With the development of technology, money laundering events are increasing. Therefore, it becomes more and more critical for businesses to measure the possibility of money laundering or terrorism financing. At this point, businesses need Money laundering (AML) Risk Assessment, an analytical process applied to a business to measure the possibility of money laundering or terrorist financing.
The AML Risk Assessment carries out this process by identifying places where money laundering is the easiest in business and those who want to finance terrorist activities. This security process is usually called Key Risk Indicators (KRI). Besides, many of the sanctions currently imposed by banking regulators contain provisions that require improvements in risk management programs for AML and The Office of Foreign Assets Control (OFAC) compliance. The starting point of the strong AML risk assessment program should be an accurate and comprehensive AML / OFAC risk assessment in business.
Conducting the AML risk assessment in a business will help you:
It is also important to review your AML Risk Assessment to make sure that your Solicitors Regulation Authority (SRA) may want to see your assessment of your business, and your business will not go wrong with compliance.
The key risk indicators for global governments are:
The money laundering risk assessment requires defining the key risk indicators mentioned above, measuring risk factors, and allocating the findings to a risk range. The alternative risk range should generally be five levels; Very Low, Low, Medium, High, and Very high values should be used. The findings of the money laundering risk assessment will result in individual risk scores for each KRI, as well as the total risk score, which is the compound or general risk offered by the business.
During the risk assessment throughout the application, the following issues should be made;
Accordingly to Customer Due Diligence procedures, companies have to implement risk assessment to their customers. The most common method used for risk assessment is a sanction, PEP, and adverse media screening. With the development of technology, manual risk assessment methods lost their function and created a waste of time. Our product, AML Name Screening Software, provides sanction, PEP, and adverse media screening service. You can contact us to meet your AML and KYC obligations during the customer onboarding and monitoring process with Sanction Scanner.
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