A financial institution (FI) has decided to revamp its compliance program to be more risk-based. Which option should the FI use as part of the new risk-based compliance program?
Correct Answer: D
A risk-based compliance program is one that identifies and prioritizes the highest compliance risks to the FI and implements controls, policies and procedures to mitigate them. A data-based option is the most suitable for a risk-based compliance program, as it allows the FI to collect, analyze and monitor relevant data on its customers, transactions, products, services, geographies and other risk factors. A data-based option also enables the FI to measure the effectiveness of its compliance program and adjust it as needed to respond to changing risks and regulatory expectations12.
References:
* 1: Risk-Based Approach to Compliance Management2
* 2: A Risk-Based Approach to Regulatory Compliance1
Reference:
https://www.ifc.org/wps/wcm/connect/e7e10e94-3cd8-4f4c-b6f8-1e14ea9eff80/45464_IFC_AML_Report.pdf?M