A financial regulator is evaluating the effectiveness of a financial institution's (Fl) anti-financial crime program. Which condition should be met…

The condition that should be met to satisfy the regulator is that the program is drafted using a risk-

based approach to avoid the FI being used as a conduit for criminal activities. A risk-based approach

means that the FI identifies, assesses, and understands its exposure to financial crime risks and

applies appropriate measures to mitigate them. This is consistent with the international standards

and best practices for anti-financial crime compliance. The program being aligned with the financial

industry’s anti-financial crime priorities, meeting the minimum requirements of anti-financial crime

standards published by a financial industry association, or having no high-severity issues in internal

auditing results are not sufficient to satisfy the regulator, as they do not necessarily reflect the

specific risks faced by the FI or demonstrate its effectiveness in preventing and detecting financial

crimes.

Reference: [Advanced CAMS-FCI Study Guide], page 14-15; [FATF Guidance on Risk-Based Approach

for Effective Supervision], page 7-8.