A new compliance officer is reviewing the bank's anti-money laundering program and notices that the risk assessment was completed six months ago. Since that time, the bank acquired another financial institution, re-named the internal records group, and streamlined cash handling procedures.
Which factor causes the compliance officer to update the bank's risk assessment?
Click on the arrows to vote for the correct answer
A. B. C. D.A
The correct answer to this question is (A) The bank acquired another institution.
The risk assessment is a critical component of any anti-money laundering (AML) program. It is used to identify and assess the risks that the bank faces in terms of money laundering and terrorist financing, and it provides the foundation for the development of effective risk-based AML policies and procedures.
In this scenario, the compliance officer has identified three changes that have occurred within the bank since the last risk assessment was completed: the acquisition of another financial institution, the re-naming of the internal records group, and the streamlining of cash handling procedures. While all three changes may have an impact on the bank's AML program, only the acquisition of another financial institution is likely to have a significant impact on the risk assessment.
The acquisition of another financial institution may result in changes to the bank's customer base, products and services offered, and geographic footprint. These changes could increase the bank's exposure to new risks, such as those associated with the new customer base or new geographic regions. As a result, it is essential to conduct a new risk assessment to ensure that the bank's AML program is effective in addressing these new risks.
While changes to the internal records group and cash handling procedures may also impact the bank's AML program, they are unlikely to result in significant changes to the risk assessment. Therefore, (A) The bank acquired another institution is the correct answer to this question.