Risk Assessment: The Cornerstone of Your Financial Crime Controls

Risk assessments provide financial institutions with a structured and effective means of identifying, measuring, and mitigating financial crime risks, including money laundering, sanctions violations, fraud, and corruption.

At OpusDatum, we offer peace of mind through global standardisation, helping financial institutions of all sizes meet their regulatory obligations while enhancing their risk management frameworks.

Our Client

Our client is a global banking and financial services company headquartered in the UK, serving over 48 million customers worldwide. In an environment of evolving financial crime threats and stringent regulatory expectations, assessing risk effectively is essential for financial institutions.

Many organisations lack a comprehensive view of their financial crime risks, making it crucial to embed financial crime controls within a robust risk management framework. Developing an effective risk assessment tool tailored to the organisation’s needs is a key priority in mitigating exposure to financial crime.

The Challenge

Financial crime risk assessment is the first step in managing the risks associated with financial crime.

A risk assessment framework is the basis from which all organisations can derive risk indicators and assess their financial crime risk exposure. The framework should include identifiable risk metrics, to provide the most effective levels of compliance and ability to detect, report and prevent corruption, money laundering, terrorist financing, sanctions violations and fraud.

To comply with Financial Conduct Authority (FCA) guidance and the expectations of the US authorities, our client needed to implement, standardise and globalise its financial crime risk assessment process. A previous incarnation of the process had collected information by email and spreadsheets. This process was inherently inefficient and not fit for purpose for a global financial institution.

De-risking – the phenomenon of financial institutions terminating business relationships with clients to avoid, rather than manage, risk - can frustrate AML/CFT objectives and may not be an effective way to fight financial crime and terrorism financing. ~ World Bank Group

Our Approach

Since each financial institution has unique risk factors, a 'one-size-fits-all' risk assessment template does not exist. Instead, we worked with our client to develop a tailored, risk-based approach aligned with their business model, limiting exposure to criminal activity while ensuring compliance with regulatory expectations. What we did:

• Technology Implementation: We identified and deployed a centralised data collection tool to replace manual spreadsheets and emails, ensuring a streamlined, scalable, and auditable process. By implementing this tool, we enabled the client to standardise data collection while maintaining a high level of data security and integrity.

• Security Model Development: We designed and implemented a security framework to protect sensitive financial crime risk data, ensuring compliance with regulatory standards while maintaining the confidentiality and integrity of risk assessments across global operations.

• User Training & Adoption: We conducted global training sessions across multiple regions and countries to ensure successful adoption of the new risk assessment process. This involved educating key stakeholders on the importance of the new framework, how to accurately assess financial crime risks, and how to effectively use the new tool.

• Quality Assurance: To ensure data accuracy and regulatory compliance, we validated risk assessment submissions for completeness and consistency. Our quality assurance process helped identify discrepancies early, allowing the client to refine its risk assessment methodology.

• Key Risk Indicators (KRIs): We developed risk indicators to benchmark financial crime risks across different regions and business lines. These indicators enabled the client to quantify risks effectively, track emerging trends, and prioritise areas requiring enhanced risk mitigation efforts.

• Data Analytics: By analysing large volumes of customer and payment transaction data, we helped the client gain a deeper understanding of inherent risk exposure. Our data-driven approach enabled the client to identify patterns indicative of financial crime risks, ensuring a more proactive approach to risk management.

• Control Framework Optimisation: We provided targeted recommendations to strengthen the financial crime control framework, balancing risk mitigation with business viability. This involved advising on acceptable risk thresholds, identifying areas requiring enhanced controls, and ensuring alignment with global regulatory expectations.

Key Benefits & Measurable Outcomes for the Client's Risk Assessment

The successful global implementation of the financial crime risk assessment process delivered measurable improvements across key areas:

• Stronger Risk Management: By standardising risk assessment processes, our client gained a clearer understanding of its financial crime exposure, enabling proactive risk mitigation strategies. The structured approach provided a consistent methodology for evaluating risks across all business lines, regions, and jurisdictions.

  
  

• Enhanced Compliance: Regulatory compliance was greatly enhanced as the new framework aligned with FCA and US regulatory expectations. By implementing a centralised system, our client ensured consistent and auditable compliance reporting, reducing regulatory risk and minimising exposure to potential penalties. Additionally, early detection of financial crime risks allowed our client to strengthen controls and meet compliance requirements proactively.

  
  

• Greater Operational Efficiency: The transition from manual spreadsheets to an automated system improved operational efficiency by reducing administrative overhead and eliminating inefficiencies. Automation streamlined workflows, reduced processing time, and ensured a higher degree of accuracy in risk assessments. This shift not only improved the quality of risk evaluations but also allowed teams to focus on risk analysis rather than data collection.

  
  

• Increased Risk Awareness: The new framework enabled comprehensive assessments across multiple jurisdictions, providing senior management with actionable insights. These insights empowered decision-makers to adopt a strategic, risk-based approach to managing financial crime threats. By leveraging analytics, our client was able to uncover emerging financial crime trends and implement targeted controls accordingly.

  
  

• Scalability & Expansion: The success of the initial implementation led our client to expand the platform’s capabilities, incorporating additional financial crime risk assessments across various domains. This adaptability ensures that our client remains equipped to respond to evolving threats and regulatory changes.

  
  

• Cost Savings: By reducing manual intervention and automating key risk assessment processes, our client optimised resource allocation while improving the consistency and quality of assessments. This efficiency translated into cost savings and allowed compliance teams to focus on high-value risk management activities.

  
  

• Future-Ready Risk Management: By embedding a globally standardised risk assessment framework, our client has strengthened its ability to identify, assess, and mitigate financial crime risks in alignment with evolving regulatory expectations.

How We Can Help

At OpusDatum, we specialise in financial crime risk management solutions tailored to the unique needs of global financial institutions. Whether you need to develop a robust risk assessment framework, improve regulatory compliance, or enhance risk analytics, our experts are here to support your journey.

Contact us today to learn how we can help you strengthen your financial crime risk management strategy.