A retail bank prepares a yearly AML risk assessment. Which inherent risk factor is likely the most relevant?
Click on the arrows to vote for the correct answer
A. B. C. D.B
When preparing an AML risk assessment, it is important to consider various inherent risk factors that may be relevant to a particular bank's business activities. The answer to this question would depend on the specific circumstances of the bank's operations and its customer base. However, based on the options provided, the most relevant inherent risk factor would likely be the provision of cash services (Option B).
The provision of cash services is generally considered a higher inherent risk activity for AML purposes due to the increased potential for money laundering or terrorist financing. Cash is inherently anonymous and can be easily moved across borders without detection. Additionally, cash-intensive businesses such as casinos, check-cashing services, and money service businesses are often targets for money launderers due to their ability to accept and dispense large amounts of cash.
In contrast, the provision of brokerage services (Option A) may also be considered a high-risk activity due to the potential for securities-related money laundering. However, this would depend on the specific types of securities being traded and the customer base involved.
The provision of payable through accounts (Option C) and remote check deposit services (Option D) are generally considered lower-risk activities for AML purposes, as they are not typically associated with large cash transactions or the movement of physical currency.
Overall, it is important for the bank to consider all relevant inherent risk factors when preparing its AML risk assessment and implementing appropriate controls to mitigate those risks.