Under the Money Laundering Regulations (MLRs), variations of which have been applied in all developed economies globally, firms are required to conduct and maintain a Financial Crime Risk Assessment (FCRA), that is specific to their business, and includes their products, clients, delivery channels, and geography.
Financial crime risks are by definition broad and evolve over time, and can relate to money laundering, terrorist financial, proliferation financing, sanctions, bribery and corruption, tax evasion, and fraud.
If a firm does not adhere to the MLRs, or operates outside of its own risk appetite, steps should be taken by a firm to address this. Internal reporting must be established to ensure the firm’s senior management and governing bodies are kept aware of the risks, controls and the various mitigating actions. In some cases, external reporting may also be required to regulatory bodies such as the Financial Conduct Authority and/or to Financial Intelligence Units such as the National Crime Agency.
RISKGRID enables firms to clearly map their financial crime controls directly against the MLRs and/or against specific risks that their business is exposed to. It allows firms to determine any areas of non-compliance and/or excess residual risk that need to be addressed.
RISKGRID also allows for actions to be documented, mapped to the risks, and tracked to closure, with enhanced reporting functionality. This ensures full transparency to senior management and critically to external regulatory or police authorities.
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