LOW | MEDIUM | HIGH | EXTREME |
1 | 2 – ALARP | 3 | 4 |
Simplified CDD | Mitigation efforts | Enhanced CDD | Unacceptable |
Risk Level | Description | Color Code | Requirements |
Low | The consequences of the risk are minor, and it is unlikely to occur. Minimum monitoring is required. | Green | Minimum information as required by legislation |
Medium | Somewhat likely to occur with slightly more serious consequences. Monitoring is more often than Low but not as frequent as annual. | Yellow | Additional information may be required, such as further identification of the Beneficial Owner |
High | Serious risks with significant consequences that are likely to occur. Requires BOD approval before acceptance. | Orange | Enhanced due diligence to obtain a detailed client profile and ongoing monitoring |
Extreme | Catastrophic risks with severe consequences that are highly likely to occur. Not accepted and reported to the BOD. | Red | Immediate response to threats to the success of the company |
Impact | Risk is unlikely to occur | Risk is likely to occur | Risk will occur |
Acceptable | 1 | 2 | 3 |
Tolerable | 2 | 3 | 3 |
Undesirable | 3 | 4 | 4 |
Intolerable | 4 | 4 | 4 |
Risk Category | Description |
Acceptable | Risks that bring no real negative consequences, or pose no significant threat to the company. |
Tolerable | Risks that could potentially bring negative consequences, posing a moderate threat to the Company. |
Undesirable | Risks with substantial negative consequences that will seriously impact the success of the organization or project. |
Intolerable | Risks with extreme negative consequences that could cause the entire company to fail or severely impact daily operations of the organization. |
Risk Category | Description |
Unlikely | Extremely rare risks, with almost no probability of occurring. |
Likely | Risks that are more typical, with about a 50/50 chance of taking place. |
Will Occur | Risks that are almost certain to manifest. Address these risks first. |
When onboarding a new client, a comprehensive risk review is crucial to assess potential risks. The structured form provided is a tool to facilitate this process effectively.
Key Sections:
Client Information: Capture name, contact details, and background.
Nature of Business: Understand industry, products/services, and operations.
Risk Assessment: Evaluate financial, legal, regulatory, and reputational risks.
Risk Mitigation: Document and outline strategies to manage risks.
Compliance Check: Ensure client adheres to laws, regulations, and policies.
Using this form helps evaluate and manage client risks, ensuring secure onboarding.