Financial Action Task Force (FATF)

The FATF promotes the implementation of a **Risk-Based Approach (RBA)**. What does this mean for financial institutions?

MCQ

MCQ Answer

A. Treating all customers as high-risk.
B. Allocating resources to AML/CTF measures commensurate with the assessed risks (i.e., higher risk, stronger controls). Correct

Explanation

RBA allows for flexibility and efficiency in applying controls, ensuring resources are focused where they are most needed.

C. Ignoring low-risk customers entirely.
D. Mandating the same set of controls for all products.

Correct Answer

Allocating resources to AML/CTF measures commensurate with the assessed risks (i.e., higher risk, stronger controls).