Developing an Effective Financial Crime Risk Matrix

One day, Advanced Level

This course is available for the following business areas:

1. PIMS (private, investment, merchant banks and securities businesses plus hedge funds, trust companies and similar businesses).

2. RFS (Retail Financial Services (RFS) including retail and SME banks, insurance, funds management, pensions companies, insurance brokers, etc.)

3. Professional practices including law, accounting and audit firms and property agents.

An effective money laundering risk management programme depends on a series of decisions.

To make those decisions, you set a series of criteria, and apply those as a template to new business and to transactions as they happen.

But how do you set those criteria in a structured way, and how do they link together to give you an effective risk control measure?

How do you maintain the criteria in order to ensure you do not get too many false positives - and don't let important issues slip through?

The answer is a risk matrix.

What is a “Risk Matrix?”

We hear a lot about “black box” analysis. A risk matrix is not a black box : it's a dynamic decision-making tool that you can apply to all of your customers to identify those who are within the "safe" zone - and which allow you to identify those that are higher but still acceptable risk as well as those that you should consider a high risk, even if not reportable. And it's part of best practice.

The risk matrix is defined by and in turn defines your company's appetite for risk. The concept is simple: the execution is complex.

Building a risk matrix involves considering a wide range of factors, including an analysis of your company, its products and services, factors relating to the customer and counterparties and external factors. An effective risk matrix does not stand still: it changes as applicable circumstances change.

That sounds like hard work – but it need not be. And properly executed a risk matrix will provide the starting point for all of your other systems to detect and deter money laundering, terrorist financing and other financial crime.

In this intensive and highly practical course, you will build a risk matrix that suits a fictitious company and its products, and take away a model that you will be able to modify to take account of your own company's circumstances and changes in the environments in which you operate.

In this course you will learn how to design and use a risk matrix:
* factors that underpin risk matrix development
* economics factors that underpin the "proceeds" section of the matrix
* assessing countries risk
* assessing client types and risk
* assessing anticipated transaction profiles
*adding in external factors e.g. sanctions
* setting the weighting factors
* applying the matrix in practice
* the limitations of the matrix approach
* beyond the matrix – how it plugs into your existing systems and enhances them
* how to maintain the matrix

An effective Money Laundering Risk Matrix is:

- simple and inexpensive to set up

- simple and inexpensive to deploy

- simple to use

- simple and inexpensive to maintain

An effective Money Laundering Risk Matrix has the following outputs:

- prioritisation of risk based on factors you specify and applicable to you, your customers and your legal and commercial obligations

- alerts to higher risk customers and transactions based on your own assessment of risk

An effective Money Laundering Risk Matrix provides

- assessment information for you to make informed decisions for money laundering, terrorist financing and compliance purposes.

Your course leader

Nigel Morris-Cotterill, Head, The Anti Money Laundering Network

Nigel Morris-Cotterill was a litigation solicitor for a quarter of a century and formed Silkscreen Limited in 1994 as a specialist compliance and risk management consultancy for money laundering professionals. He has developed counter-money laundering strategies and advised on laws and regulations in many countries and industry sectors.

Nigel created the concept of Risk Values to assess the risk of financial crime presented by customers at the point of sale. He has also developed training strategies and the class-leading Quick To Learn More e-learning programme.

Nigel created and still edits World Money Laundering Report, the only truly global newsletter for counter-money laundering professionals and its online daily news service World Money Laundering Report Online: Daily News with its sister online library World Money Laundering Report Online: Resources.

Nigel wrote the best-selling “How not to be a money launderer,” which in 1995 introduced the concept of risk management into the area of money laundering and terrorist financing.

Nigel is highly regarded as a counter-money laundering strategist and is a commentator of choice for many international media outlets because of his ability to take complex concepts and explain them in a simple and accessible way.

Nigel created the concept of The Financial Crime Forum, a series of interactive events in which delegates take an active part throughout the proceedings.

In this course, he gives delegates the benefit of all of that experience and shows how a Risk Matrix reduces risk in a simple and cost effective manner.



© 2015 Nigel Morris-Cotterill
All rights reserved