Thread Options
#367353 - 06/02/05 07:22 PM Assessing risk on existing customers
Dottie Offline
100 Club
Joined: Oct 2004
Posts: 113
I know this subject is being driven into the ground and there are no concrete answers, but does anyone have a suggestion on assessing risk on existing customers? I'm trying to figure out the best way to tackle this big job.

Return to Top
BSA/AML/CIP/OFAC Forum
#367354 - 06/03/05 10:24 AM Re: Assessing risk on existing customers
MagicCity Offline

Power Poster
MagicCity
Joined: Apr 2003
Posts: 3,003
Fort Lauderdale, Florida
I would start with the type of industry - starting with the 22 industries given by the OCC as high risk, - then from actual activity.
Cash intensive customers and those with international wire activity would be high risk.
Long established customers with regular contact with the bank would be considered the lowest risk.

Return to Top
#367355 - 06/03/05 01:56 PM Re: Assessing risk on existing customers
Dottie Offline
100 Club
Joined: Oct 2004
Posts: 113
Thank you for your help. Did you do this by yourself or did you delegate? I'm a one-person compliance dept. Or do you have some kind of a program that can do things like locate the customers that fit the 22 industries named by the OCC?

Return to Top
#367356 - 06/03/05 03:21 PM Re: Assessing risk on existing customers
First Banker Offline
Gold Star
First Banker
Joined: Apr 2005
Posts: 403
Florida
I am just starting this process at my bank. I have a printout of all business accounts in branch order. The branch managers will use this to id high risk customers.

Return to Top
#367357 - 06/03/05 04:03 PM Re: Assessing risk on existing customers
Dottie Offline
100 Club
Joined: Oct 2004
Posts: 113
That's a good idea. Giving them just business accounts to assign risk would narrow down the list quite a bit. I could give the personal accts a general risk rating and adjust that by any activity I find on my AML monitoring reports...like intl wires and so forth. We have a way to assign risk through the CIF records which then can be used to generate reports. I'm thinking of giving the branches a list of high risk criteria to use to help them assess the business accts. Am I on the right track? I just want to be as accurate as possible.

Return to Top
#367358 - 06/03/05 06:11 PM Re: Assessing risk on existing customers
First Banker Offline
Gold Star
First Banker
Joined: Apr 2005
Posts: 403
Florida
That is exactly what I have in mind. I attached the page showing the "official" high-risk businesses. The consumer rating would depend on if they sign in a high-risk business account, plus whether they are flagged during normal monitoring, which includes wire activity. I created a BSA Risk Code field at the account level to input their risk rating. On the customer level I reated a CIP field to indicate that the customer has been screened through the new procedures. They check this when any contact of any type is made with a customer, and if necessary they complete the new CIP form at that time.

Return to Top
#367359 - 06/03/05 07:36 PM Re: Assessing risk on existing customers
WildTurkey Offline
Platinum Poster
WildTurkey
Joined: Jan 2003
Posts: 921
Down South, USA
Quote:

I am just starting this process at my bank. I have a printout of all business accounts in branch order. The branch managers will use this to id high risk customers.



Of course nobody would ever launder money through a personal account!
_________________________
This is my opinion; it is not legal advice, nor the view of my employer, and it may change tomorrow.

Return to Top
#367360 - 06/07/05 07:19 PM Re: Assessing risk on existing customers
First Banker Offline
Gold Star
First Banker
Joined: Apr 2005
Posts: 403
Florida
Had to start somewhere!!

Return to Top
#367361 - 06/07/05 10:52 PM Re: Assessing risk on existing customers
Runin' Reb Offline
100 Club
Runin' Reb
Joined: Dec 2003
Posts: 102
West Coast
This is exactly what we did....and its working out pretty well...

This is the process that we're following:

1) Print list of all business' by branch since 10-1-03
2) Managers are to identify high risk business based on FDIC's official list of High Risk Business'. Once all High Risk Business' are identified, a new report will be printed to show only high risk business'
3) Managers are to take the new High Risk Business list and identify which accounts are considered MSBs (this was the difficult part-managers had to pull sample deposits to see if any checks were cashed, etc...)
4) Once all MSBs are identified, managers are to check the FINcen Website to see if they are registered.
5) If not registered, managers are to send a letter telling them to register.
6) Follow up in 45 days...If no registration, SAR

Thats it in a nutshell....were on step 5. Business', for the most part, are being cooperative.

Next comes getting AML procedures, etc, etc.....

Man I just love this stuff!
_________________________
"Saying what we think gives us a wider conversational range than saying what we know"

Return to Top

Moderator:  Andy_Z