Report The RegSmartSM Risk Assessment yields a Composite Risk Rating for the institution as a whole and Categorical Risk Ratings for an institution's:

• Operations & Historical Data
• Geographical Data
• Products & Services
• Customer Base
• Personnel & Training, and
• BSA Administration

The purpose of this Risk Items Report is to:

• Show Categorical Risk Ratings for each critical category
• Identify those items that (after adjusting for mitigating controls) increase risk in each Category
• Show the Inherent Risk for each higher-risk item, and
• Show the Residual Risk the institution assigned after considering Mitigating Controls.

It is important to understand that the Composite and Categorical Risk Ratings are compiled based on Residual Risk (where the institution has adjusted risk downward), not on Inherent Risk. RegSmartSM shows Inherent Risk below as a tool for the compliance professional and senior management to see where the institution's Inherent Risk is highest and where the institution has adjusted risk down with the proper application of mitigating controls.

This Report is a critical component for a Risk-Based approach to BSA/AML compliance-- allowing the compliance professional and senior management to apply human capital and technology to high risk areas. The Report also provides a critical summary of Inherent Risks and institution-assigned Residual Risk, which shows the internal or external compliance professional and auditor areas in which the institution believes mitigating controls reduce risk.

The accompanying Risk Items Report details each area (e.g., specific products, services, and customers) that represent higher BSA/AML Risk. It also shows areas that have high Inherent Risk to which your BSA professionals have applied mitigating controls and adjusted the risk profile accordingly. This will give you an idea of the areas in which your BSA/AML Program is expending (or should expend) human capital and technical resources in an effort to reduce risk.