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Acams CAMS Exam - Topic 2 Question 112 Discussion
Topic #: 2
What is the primary advantage of using a risk-based approach in allocating compliance resources?
The CAMS 6th Edition highlights that a risk-based approach enables organizations to efficiently allocate compliance resources, focusing efforts on areas presenting the highest risk, thereby ensuring both regulatory compliance and operational effectiveness.
''A risk-based approach allows firms to concentrate resources and controls where the risk of ML/TF is highest, while applying simplified measures to lower-risk areas. This enhances both effectiveness and efficiency.''
(CAMS 6th Edition, AML Compliance Program: Risk-Based Approach)
Incorrect Options:
A: Cost savings may occur, but it is not the main advantage.
B: Audits may still be required, just less frequently for low-risk customers.
D: Risk-based approaches are tailored, not standardized, across regions.
CAMS Study Guide 6th Edition, AML Compliance Program, ''Risk-Based Approach''
FATF Recommendation 1: Assessing risks and applying a risk-based approach
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