September 21, 2016 Disclaimer: These views are those of the presenter and not necessarily those of the Federal Reserve Bank of Boston, or the Federal Reserve Board.
Effectiveness of Controls/ Residual Risk/ Inherent Risk Mitigating Risk Rating Controls Automated Products Well-supported systems Services and documented Manual Customers methodology processes Geography Policies/ Branching procedures Transactions Recent audit/exam results Staffing Can incorporate OFAC or conduct separate OFAC risk assessment
Use of automated systems vs. manual processes Changes to systems/processes Customer acceptance Reconciles with controls/mitigates detailed in the risk assessment Level of reliance on staff outside of BSA department
Frequency Areas covered Methods Business Units/Personnel/ BOD Changes to or significant procedures
Scope ◦ All higher risk areas? Depth of transaction testing ◦ Quantity and quality Frequency of audits ◦ More frequent or focused audits if necessary based on risk? Unusual circumstances ◦ M&A; system conversions
Risk Assessment Policy Audit and exam results Suspicious Activity CTR volume Customer profile/base Training efforts New regulations
Contact information: ◦ Gabriela Webber ◦ Federal Reserve Bank of Boston ◦ 600 Atlantic Ave, Boston, MA 02210 ◦ (617) 973-3377 ◦ Gabriela.Webber@bos.frb.org Federal Reserve System Community Banking Connections, "Assessing Inherent BSA/AML Risk at Community Banks”, Third Quarter 2013 ◦ https://www.communitybankingconnections.org/articles /2013/q3/assessing-inherent-bsa-aml-risk-at- community-banks
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