BSA and Customer Risk Assessment

Question: We are struggling with customer risk assessment for BSA. We pay close attention to high risk customers and review all their transactions monthly. My question is how much attention do we have to give to low risk customers?

Answers:Assessing and rating the risk presented by each customer or type of customer is a judgmental process. There are no absolutes or clear answers. And, just as the risk ratings are judgmental, so are decisions about the level of attention and review you should give to each customer. But judgment must occur in a context. This means that you should have a clear idea of what about each customer or customer group presents risk or does not present risk. You should also take into account any change, whether in the market, your products, or the customers' behavior. The schedule for reviews should reflect this risk. There is also a reality check that should be involved. You have limited resources. Your priorities should be placed according to your resources. The high risk customers should get the most attention. But don't totally ignore the low-risk customers. In particular, look for change in banking patterns.

Copyright © 2005 Compliance Action. Originally appeared in Compliance Action, Vol. 10, No. 13, 11/05