The Threat Lens: Putting the Financial Crime Threat back into the AML/CTF Risk Assessment

Anti-money laundering (AML) and counter-terrorist financing (CTF) programs are designed around a decade-old compliance-focused model that acts as a proxy for financial crime risk. Today, it is time to think beyond the status quo. Financial institutions find themselves exposed to a more diverse and complicated set of criminal threats. Challenger banks, non-traditional business models, and the rise of fintech call for new approaches to financial crime risk.

A threat-centric model for anti-financial crime, based on a collaborative ecosystem of digitized, intelligent controls at the heart of the banking sector, can help financial institutions to better understand and quantify financial crime risk, and to respond dynamically. Digitization will also improve the effectiveness and efficiency of their financial crime compliance strategies. The threat-centric model also creates an opportunity for international co-operation on reimagining compliance standards through a transition to a threat-based assessment of risk.

This report discusses the case study of Mox, a new digital bank based in Hong Kong, developing and applying a threat-based control assessment to its risk control framework.

Download the report, The Threat Lens, from Oliver Wyman.