Developing a process to assign customer risk ratings helps to accurately and consistently:
>identify the risk of each customer
>assign appropriate risk ratings. For example, low, medium or high risk.
In an ML/TF risk assessment, when rating risk across a business(EWRA), AUSTRAC recommends determining the LIKELIHOOD and IMPACT of each factor such as the
>Customer,
>Service,
>Channel and
>Jurisdiction.
When understanding customer risk on a case-by-case basis, a good method may be using the ‘impact’ rating in the ML/TF risk assessment from EWRA as a starting point. This can be done without considering the ‘likelihood’ rating.
The next step is then to assign a risk rating to each customer by doing all of the following:
>checking whether each risk factor identified is present for the customer
>balancing the nature and scale of each risk factor present to reach an overall risk rating for the customer
>considering any indicators of unusual or criminal activity that may be present.
