Customer Risk Assessment
Question: How often do we have to determine the risk presented by our customers in order to comply with BSA?
Answer: It is tempting to tell you that you should do this on a specific schedule, but there is no set answer. The trick is that the answer depends on the risk you face. The higher the risk, the more frequently you should assess customer risk. In addition, the high risk customers should be evaluated more frequently than low-risk customers who present no change in their account activity. With that being said, the real answer is that you should not postpone risk assessments beyond the point where you feel comfortable. The purpose of the risk assessment is to manage risk. If customer risk is evaluated so infrequently that risk is not identified and managed, you aren't doing it often enough.
Copyright © 2005 Compliance Action. Originally appeared in Compliance Action, Vol. 10, No. 10, 9/05
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