A thorough understanding of its financial crime risks is key if a firm is to apply proportionate systems and controls. The following are self-assessment questions to help you implement an efficient risk assessment to mitigate the risk behind finance crime.
Self-assessment questions:
- What are the main financial crime risks to the business?
- How does your firm seek to understand the financial crime risks it faces?
- When did the firm last update its risk assessment?
- How do you identify new or emerging financial crime risks?
- Is there evidence that risk is considered and recorded systematically, updated assessments, and appropriate sign-off?
- Who challenges risk assessments and how? Is this process sufficiently rigorous and well-documented?
- How do procedures on the ground adapt to emerging risks? (For example, how quickly are policy manuals updated and procedures amended?)
Examples of good practice:
- The firm’s risk assessment is comprehensive.
- Risk assessment is a continuous process based on the best information available from internal and external sources.
- The firm assesses where risks are greater and concentrates its resources accordingly.
- The firm actively considers the impact of crime on customers.
- The firm considers financial crime risk when designing new products and services.
Examples of poor practice:
- Risk assessment is a one-off exercise.
- Efforts to understand risk are piecemeal and lack coordination.
- Risk assessments are incomplete.
- The firm targets financial crimes that affect the bottom line (e.g. fraud against the firm) but neglects those where third parties suffer (e.g. fraud against customers)
Using an external services provider to conduct your Financial Crime Risk Assessment
Aside from it often being difficult to schedule time for this type of review or to know where to start, there is considerable benefit in having an independent, objective review of the financial crime risks that your business faces. Corporate Research and Investigations Limited (CRI® Group) has a wealth of knowledge in Financial Crime and can help you identify risks and exposures that might otherwise be missed, thereby enabling appropriate procedures to be put in place.