An institution is looking to alter an existing threshold-based monitoring scenario because it is generating too many alerts that do not yield suspicious activity reports. Documentation submitted to…

Question

Options

• Aevidence that the increased residual risk arising from the change is within the bank's risk appetite.
• Bapproval by money-laundering reporting officer for the proposal.
• Chow many resources are spent on the less productive lower threshold and the associated costs.
• Dthe number of cases that will not be filed and the resources that can be freed up for other tasks.
• Eminutes of meeting held with the regulator where agreement was obtained that the higher
• Fhistorical analysis proving that the current scenario generates a disproportionate number of false

• A
  81% (25)
• B
  13% (4)
• D
  3% (1)
• E
  3% (1)

Explanation

The documentation should include evidence that the residual risk remains within the bank's risk appetite, analysis of resources spent and costs associated with the current lower threshold, and historical data showing the high false positive rate to justify altering the threshold while maintaining effective risk management.

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