• Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • AML-CFT
  • Library
  • News
  • Articles
  • Higher Risk Countries
  • About

De-risking

By JX Low · 4 Sep 2020

Derisking
You are here:
  • Library
  • Definitions
  • De-risking
  • LinkedIn
  • Facebook
  • Twitter
  • WhatsApp
  • Telegram
  • Print

The Finanial Action Task Force defines de-risking as:

The phenomenon of financial institutions terminating or restricting business relationships with clients or categories of clients to avoid, rather than manage, risk in line with the FATF’s risk-based approach

The approach towards de-risking is counter-productive to the goals of an anti-money laundering /countering the financing of terrorism (AML/CFT) framework as it encourages the flow of funds via unregulated channels.

Financial institutions should instead manage their risks intelligently on a case-by-case basis rather than taking the shortcut and eliminating the risk wholesale.

  • LinkedIn
  • Facebook
  • Twitter
  • WhatsApp
  • Telegram
  • Print

About JX Low

Editor · Dip(AML)

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Subscribe to our Newsletter for latest updates!

Explore the Library ▸

What is Money Laundering? Terrorist Financing? a Politically Exposed Person? De-risking? the risk-based approach? AML/CFT?

Company Registers

Read Also ▸

duediligence

How to conduct proper customer due diligence (CDD)

1 Feb 2020

AML policy

Formulating a Comprehensive AML Policy

2 May 2017

1MDB MAS

MAS 1MDB probe: Summary of Regulatory Actions taken

20 Dec 2017

Footer

AML-CFT
  • Facebook
  • LinkedIn
  • RSS
  • Twitter

Copyright © 2021 · AML-CFT · All Rights Reserved
Terms of Service / Privacy Policy / Contact