The money laundering and terrorism financing (ML/TF) risk assessment is the foundation of your AML/CTF Program, and your AML/CTF efforts. Assessing your ML/TF risks is the first thing you must do to determine what measures you need to include in your AML/CTF Program. The measures you put in place, including your policies, procedures and controls must be appropriate to protect your business from being exploited by criminals. As every business is different, the developed measures and the combination of them will be unique to your particular circumstances.
bronID has developed a framework and tools to help you with your ML/TF risk assessment and development of mitigation policies, procedures and controls. Here's a step by step guide how we do this:
Step 1: Use the bronID Risk Assessment Tool to provide insights about your business. Here you will answer questions that are specific about your business and operations such as the number of employees, jurisdictions where you operate, type of customers you onboard and specifics about your product.
Step 2 (optional): By using the scheduling tool, schedule an interview with a Compliance Adviser to go through your answers and iron out anything that might have been unclear in Step 1.
Step 3: The bronID algorithm will use the answers you provided in Step 1 and map them to different risk factors. By doing this, bronID will also assess the likelihood of some of these risk factors happening and the severity of these factors. This will give you the Inherent Risk, i.e. the ML/TF risk that your business faces without putting in place any mitigation measures.
Step 4: Having insight into the Inherent Risk of your business, you can now assess if this fits your risk appetite. If it doesn't and if you want lower you ML/TF risk and exposure, you must implement appropriate mitigation measures.
Step 5: Based on our expert knowledge, bronID will suggest measures that are appropriate to the risks you are facing. You can additionally select different measures from our Control Bank with a goal to reduce your Inherent Risk.
Step 6: bronID will calculate your Residual Risk, which is a function of your Inherent Risk minus the Control Effectiveness, i.e. the level to what the proposed or implemented measures reduce the risk of your business being abused for ML/TF. Note that you will reassess the level of effectiveness over time as you collect more empirical data. If the Residual Risk does not fit your risk appetite, you should repeat Step 5 until the Residual Risk is down to a level that is acceptable for you.