The Blueprint for a Successful Enterprise-Wide Risk Assessment

An effective Enterprise-Wide Risk Assessment (EWRA) is the foundation of a robust Anti-Money Laundering (AML), Counter-Financing of Terrorism (CFT), and Counter-Proliferation Financing (CPF) program of a business. Incorporating best practices and avoiding key missteps while conducting the EWRA ensures that it is comprehensive and effective. Here is the blueprint for a successful Enterprise-Wide Risk Assessment, which will help you adopt a risk-based approach and counter ML/TF/PF risks effectively.

The best practices to adopt while conducting the EWRA include the following:

• Adopting a risk-based Approach
• Well-documenting risk assessment methodology
• Incorporating mitigation strategies for new and emerging risks
• Clearly defining and communicating compliance responsibilities
• Managing residual risks
• Assessing risks after new developments in business operations
• Considering National Risk Assessment and Sectoral Risk Assessment
• Regular testing of risk prevention and mitigation controls

Key Missteps to Avoid While Conducting EWRA include the following:

• Not taking a risk-based approach while assessing the ML, TF, and PF risks.
• Not taking into consideration the nature, size, and complexity of the business.
• Not documenting the risk assessment methodology nor considering qualitative and quantitative measures
• Not conducting regular assessments to take into consideration new and emerging risks
• Compliance responsibilities are unclear, and there is no uniform way of working
• Risk appetite is not defined or documented. There are no strategies for risk management
• ML, FT, and PF risks are given no consideration while developing new products or entering new geographies.
• National Risk Assessment and Sectoral Risk Assessment are not considered while identifying and assessing risks.
• Risk prevention and mitigation controls are deployed but not tested.

Watch our video to learn more about the blueprint for a successful EWRA through best practices to adopt and common missteps to avoid while conducting the EWRA.