In order to accurately evaluate the size of risk a bank faces, or wishes to undertake, they use risk indicators such as: sources of wealth and legal entity type to identify suspicious or illegal activity. From this, regulators can develop a risk-based approach to handling the case.
Key learning objectives:
Explain why banks are fined
Describe the key identity and qualitative checks
Identify all the risk indicators, and the crucial things regulators look for in each of them