Risk Assessment

A risk assessment is the structured process of identifying, evaluating, and prioritizing potential threats that could impact an organization’s operations, compliance, or security. In financial services, it involves analyzing risks such as money laundering, fraud, cyberattacks, and regulatory breaches. Institutions evaluate both the likelihood and impact of these risks, often considering factors like customer profiles, transaction types, jurisdictions, and delivery channels.The outcome guides the design of internal controls, monitoring systems, and reporting mechanisms. For banks, fintechs, and payment providers, risk assessments are a cornerstone of AML/CFT compliance, ensuring that resources are allocated effectively to high-risk areas. Regulators worldwide, including FATF and national authorities, mandate periodic risk assessments to strengthen resilience and safeguard the financial system.