Risk Tracker

Quantifying Entity Risks

“By adopting a risk based approach, competent authorities and financial institutions are able to ensure that measures to prevent or mitigate money laundering and terrorist financing are commensurate to the risks identified.” FATF – June 2007

Since then the risk based approach now needs to be equally applied to ‘Designated Non-Financial Businesses’ too and is a key requirement in the FATF’s mutual evaluation process for countries.

As a result of this, regulatory authorities have, or are in the process of upgrading their supervisory requirements. Businesses must think of how they meet these new standards.

A risk based approach can however be a difficult concept to evidence and it is therefore helpful to regulator and regulated alike, to adopt a system which:

• Prompts consideration of appropriate risk criteria
• Invites those criteria to be weighted as to their relative importance
• Allows consistent benchmarking against the chosen criteria
• Provides reports identifying where key risks lie
• Maintains a results database and audit trail of risk amendments and