Which concept involves evaluating risk posed by members?

• A. Account Review
• B. Policies and Procedures
• C. Unusual Activity
• D. Risk Assessment

Answer: (D)

Evaluating risk posed by members is about performing a risk assessment. This is a structured, ongoing process that identifies who the customers are, where they’re located, what products or services they use, and how they access the institution, then measures how those factors translate into risk. The goal is to set appropriate controls and monitoring based on how risky different customers or groups appear, guiding a risk-based approach to AML compliance.

Account reviews are routine checks of individual accounts for activity that may warrant investigation, rather than a broad assessment of risk across the member base. Unusual activity is a trigger or alert for investigation once specific suspicious patterns have occurred. Policies and procedures are the documented rules and processes that govern operations, not the evaluation of risk itself.