How do you do a BSA risk assessment?
The following steps for creating or updating your BSA/AML risk assessment should ensure you understand your institution’s risk.
- Document the BSA/AML risk assessment.
- Identify inherent risk vs. residual risk.
- Classify the risks.
- Analyzing risk factors. Risk factor review.
Is a BSA risk assessment required?
While not a specific legal requirement, a well-developed BSA/AML risk assessment assists the bank in identifying ML/TF and other illicit financial activity risks and in developing appropriate internal controls (i.e., policies, procedures, and processes).
What is BSA AML risk assessment?
An AML risk assessment is the foundation of a strong BSA/AML compliance program, and here’s why. The foundation of any good BSA/AML program is your organization’s risk assessment. A risk assessment provides insights into your business practices, and helps you understand the associated compliance risk.
What are the 3 main factors to consider in determining AML risk?
Key Categories of BSA/AML Risk for Community Banks. Inherent BSA/AML risk falls into three main categories: (1) products and services, (2) customers and entities, and (3) geographic location.
What are the three fundamental components of risk assessment BSA?
The core procedures in the Manual identify three key risk assessments: Anti-Money Laundering (AML) Risk Assessment, CIP Risk Assessment, and OFAC Risk Assessment.
How do you write a risk assessment matrix?
How to Conduct a Risk Assessment
- Step 1: Identify Hazards. Relating to your scope, brainstorm potential hazards.
- Step 2: Calculate Likelihood. For each hazard, determine the likelihood it will occur.
- Step 3: Calculate Consequences.
- Step 4: Calculate Risk Rating.
- Step 5: Create an Action Plan.
- Step 6: Plug Data into Matrix.
What should independent testing (audit) look for in BSA/AML compliance?
Independent testing (audit) should review the bank’s BSA/AML risk assessment, including how it is used to develop the BSA/AML compliance program. Refer to Appendix I – Risk Assessment Link to the BSA/AML Compliance Program for a chart depicting the expected link of the BSA/AML risk assessment to the BSA/AML compliance program.
How does the bank structure its BSA/AML compliance program?
The bank structures its BSA/AML compliance program to address its risk profile, based on the bank’s assessment of risks, as well as to comply with BSA regulatory requirements. Specifically, the bank should develop appropriate policies, procedures, and processes to monitor and control its ML/TF and other illicit financial activity risks.
Who should receive the BSA/AML risk assessment?
The BSA/AML risk assessment should be provided to all business lines across the bank, the board of directors, management, and appropriate staff.
How do I evaluate the information in the risk matrix?
This information should be evaluated using the two-step approach detailed in the BSA/AML Risk Assessment Process subsection above. Examiners may also refer to Appendix J – Quantity of Risk Matrix when completing this evaluation.