Appendices

APPENDIX J: QUANTITY OF RISK MATRIX

Banks and examiners may use the following matrix to formulate summary conclusions. Prior to using this matrix, they should complete the identification and quantification steps detailed in the BSA/AML Risk Assessment Overview section at page 18 of this manual.

Low Moderate High

Stable, known customer base.

Customer base increasing due to branching, merger, or acquisition.

A large and growing customer base in a wide and diverse geographic area.

No electronic banking (e-banking) or the Web site is informational or nontransactional.

The bank is beginning e-banking and offers limited products and services.

The bank offers a wide array of e-banking products and services (i.e., account transfers, e-bill payment, or accounts opened via the Internet).

On the basis of information received from the BSA-reporting database, there are few or no large currency or structured transactions.

On the basis of information received from the BSA-reporting database, there is a moderate volume of large currency or structured transactions.

On the basis of information received from the BSA-reporting database, there is a significant volume of large currency or structured transactions.

Identified a few higher-risk customers and businesses.

Identified a moderate number of higher-risk customers and businesses. 

Identified a large number of higher-risk customers and businesses.

No foreign correspondent financial institution accounts.  The bank does not engage in pouch activities, offer special-use accounts, or offer payable through accounts (PTA), or provide U.S. dollar draft services.

The bank has a few foreign correspondent financial institution accounts, but typically with financial institutions with adequate AML policies and procedures from lower-risk countries, and minimal pouch activities, special-use accounts, PTAs, or U.S. dollar draft services.

The bank maintains a large number of foreign correspondent financial institution accounts with financial institutions with inadequate AML policies and procedures, particularly those located in higher-risk jurisdictions, or offers substantial pouch activities, special-use accounts, PTAs, or U.S. dollar draft services.

The bank offers limited or no private banking services or trust and asset management products or services.

The bank offers limited domestic private banking services or trust and asset management products or services over which the bank has investment discretion.  Strategic plan may be to increase trust business.

The bank offers significant domestic and international private banking or trust and asset management products or services.  Private banking or trust and asset management services are growing.  Products offered include investment management services, and trust accounts are predominantly nondiscretionary versus where the bank has full investment discretion.

Few international accounts or very low volume of currency activity in the accounts.

Moderate level of international accounts with unexplained currency activity.

Large number of international accounts with unexplained currency activity.

A limited number of funds transfers for customers, noncustomers, limited third-party transactions, and no foreign funds transfers.

A moderate number of funds transfers.  A few international funds transfers from personal or business accounts with typically lower-risk countries.

A large number of noncustomer funds transfer transactions and payable upon proper identification (PUPID) transactions.  Frequent funds from personal or business accounts to or from higher-risk jurisdictions, and financial secrecy havens or jurisdictions.

The bank is not located in a High Intensity Drug Trafficking Area (HIDTA) 305Refer to the White House's list of HIDTA initiatives. or High Intensity Financial Crime Area (HIFCA).  No fund transfers or account relationships involve HIDTAs or HIFCAs.

The bank is located in an HIDTA or an HIFCA.  Bank has some fund transfers or account relationships that involve HIDTAs or HIFCAs.

Bank is located in an HIDTA and an HIFCA.  A large number of fund transfers or account relationships involve HIDTAs or HIFCAs.

No transactions with higher-risk geographic locations.

Minimal transactions with higher-risk geographic locations.

Significant volume of transactions with higher-risk geographic locations.

Low turnover of key personnel or frontline personnel (e.g., customer service representatives, tellers, or other branch personnel).

Low turnover of key personnel, but frontline personnel in branches may have changed.

High turnover, especially in key personnel positions.

 

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