ARisk-Based Approach (RBA)allows financial institutions toallocate compliance resources effectivelyandprioritize higher-risk areasforenhanced due diligence (EDD).

Option A (Correct):An RBA enables institutions to tailor their AML controls based on risk exposure, ensuring better resource allocation.

Option B (Incorrect):While RBAimproves efficiency, itdoes not guarantee faster implementationof controls.

Option C (Incorrect):RBA is a regulatory requirement, butit is not necessarily determined by customer acceptance.

Option D (Incorrect):RBA provides guidance on risk mitigation, but itdoes not dictate specific resource usage.

Benefits of a Risk-Based Approach (RBA):

Efficient use of compliance resourcesby focusing onhigh-risk transactions, customers, and geographies.

Regulatory compliance alignmentwithFATF, Basel Committee, and Wolfsberg Group AML principles.

Flexibility to adjust AML controlsas new threats emerge.

Best Practices for Implementing RBA in AML Compliance:

Conduct enterprise-wide risk assessments (EWRAs).

Classify customers and transactions based on risk levels.

Apply enhanced due diligence (EDD) for high-risk clients.