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LIVEEX – RISK

Risk-Based Approach

The British regulator is the first proposing Risk-Based Approach, the Financial Conduct Authority (FCA), in 2000. With this recommendation The Financial Action Task Force (FATF) first utilized the risk-based approach in 2007, with FATF, global organizations such as FATF member countries, Wolfsburg Group, and International Organization of Securities Commissions adopted the risk-based approach principle. Since then, the “risk-based approach” has definitely turned out to be one of the most broadly used expressions in the subject of anti-money laundering (AML). In addition, it is an essential tool for high-quality AML management. The FATF is now in the process of reviewing its set of RBA guidance papers to bring it in line with the requirements of the revised FATF Recommendations, and to reflect the experience gained by public authorities and private sector over the years.
In its easiest definition, the risk-based approach is the recognition of manage in AML administration in accordance to the risk perception, appetite of the organizations and the customers’ risk level. Risk-Based Approach – Implementation of the risk-based approach Identify – Identify the Risk Factor Assess – Identify the level of Risk Understand – understand the impact of the Risk Mitigation – Mitigation management Risk-based approach, risk factor identification or indications that can allow the evaluation and dimension of the level of risk can be summarized in the following, | Customer | (a) Customer background (b) AML system check (c) Political affiliations if (PEPs) | Geographical Risk | (a) Country of residence (b) Country of incorporation | Product and Servicers | (a) Type account and or facility (b) Account currency (c) Previous banking relationship | Industry | (a) Nature of business activity (b) Related activities.

LiveEx-Shield, Risk Based Framework

The risk-based approach (RBA) is central to the effective implementation of the FATF Recommendations adopted in 2012. Between 2007 and 2009, in order to assist both public authorities and the private sector in applying a risk-based approach, the FATF has adopted a series of guidance in co-operation with relevant sectors. The FATF is now in the process of reviewing its set of RBA guidance papers to bring it in line with the requirements of the revised FATF Recommendations, and to reflect the experience gained by public authorities and private sector over the years.

A heat map is a snap-shot visible show of data. It is an environment friendly way of deciphering a excessive degree risk status. For senior managers and Board of administrators who have many things to determine, it is no longer easy, or the excellent use of their resourcing, to have to examine specified and cumbersome written reports. A heat map presents the gain of a snap-shot visible show of risk status and is an efficient way to interpret giant and occasionally complicated data.

LiveEx-Shield, Risk Mitigation

The LiveEx system offers inbuilt Risk Mitigation form in extended version to ensure effective risk mitigation – to assess implementation of preventative measures and the strength of control and audit functions at a group-level.

In order to assess the inherent risks, the LiveEx system is inbuilt with

Customer Risk

Geographical Risk

Product – Service – Transaction Related Risk

LiveEx – Assessing of Residual Risk

The LiveEx system is provides four categories in the RBA Framework such as Low, Medium, Medium High and High. In determining these ratings, the LiveEx system considers the categories in both inherent and residual risks. The residual risk rating can be customized according the nature, size and complexity of the business by the organization MLRO or Reporting Officer. Based on the inherent risk and mitigation control the LiveEx system will generate the Residual Risk with the Periodic Review schedule.  High Risk Transaction Monitoring  
  • All the High-Risk transactions will be escalated to Compliance Monitoring.
  • Realtime Customer History Analysis
  • Multi-Level Escalations
  • RBA Investigations
  • Mitigation Control verification
  • Email alert to concerned department
  • Quick review dashboards

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