Risk Analysis for BSA

The new BSA examination procedures are risk-based. This means that the examiners will use a risk-based approach and that the examiners will expect that the institution has both assessed its risk and designed measures for managing the identified risk. They do not encourage managing risk by refusing to take any high risk customers or high risk transactions. Instead, examiners will be evaluating the BSA program to determine whether the institution accurately identifies risk and designs and carries out effective management of that risk. For example, they will be looking not to see that you closed all MSB accounts, but that you are managing the risk presented by MSB customers. To that end, understanding what contributes to risk in BSA programs is critical. It entails taking a hard look at products and services, your customers, and the markets and locations in which you do business. Set out below is one approach to analyzing risk. We also recommend that you use Appendix J in the BSA examination procedures.

Risk Analysis for BSA Chart

Copyright © 2005 Compliance Action. Originally appeared in Compliance Action, Vol. 10, No. 9, 8/05