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FinCEN’s AML/CFT Priorities: A risk assessment perspective

Elissa Brewer, CAMS
February 15, 2023
Read Time: 0 min

Develop your risk assessment with the AML/CFT priorities in mind

Evaluating each FinCEN priority and addressing them in your financial institution's risk assessment is key to compliance.

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Incorporating the AML/CFT priorities into a risk assessment

Understanding the evolving landscape of anti-money laundering (AML) and countering financing of terrorism (CFT) is vital for financial institutions. Here, we dive into the specifics of the AML/CFT priorities from a risk assessment viewpoint, emphasizing their significance in today's dynamic financial ecosystem. 

While many financial risks are universal, the unique AML/CFT priorities outlined by FinCEN require specialized attention. Banks and credit unions must remain current on trends, integrate national priorities into their risk assessment methodologies, ensure compliance, and foster risk tolerance. 

Financial institutions should not regard AML/CFT priorities as isolated risks in creating risk assessments. Institutions must provide a detailed overview of their strategies for each priority for effective risk mitigation, incorporating any ancillary documents or procedures that supplement their risk determination. 

The pivotal aim of these priorities is to address avenues of illicit proceeds susceptible to illegal activity within the U.S. Consequently, money laundering underpins all FinCEN Priorities, even if not singled out distinctly. 

Corruption – More than just undermining democracy, corruption deepens socio-economic disparities. In their fight against corruption, financial institutions must fortify their know your customer (KYC) processes and vigilantly monitor for transactional red flags of illicit activities. Recognizing corruption is not solely an external issue; institutions should be vigilant against domestic instances. While we may think of corruption as an international issue in other countries, such as Venezuela or Nicaragua, corruption can also happen within the United States.

Cybercrime In our digital age, cybercrime tactics are always evolving. Financial institutions are prime targets, necessitating strong information security measures and continuous employee training. A well-integrated transaction monitoring system, synchronized with fraud detection procedures, can identify suspicious cyber activities, including cryptocurrency transactions.

Terrorist financingBoth foreign and domestic terrorist activities rely on funds to propel their agendas. By leveraging intelligence, financial institutions can pinpoint transaction patterns linked to terrorist groups, thereby blocking monetary conduits that support their operations. A financial institution’s AML/CFT program aims to detect and report terrorist financing to disrupt or prevent the transfer of funds to further the terrorist agenda, whether in the U.S. or internationally.

Fraud - With various methods like synthetic identity fraud and skyrocketing check fraud, criminals continually seek opportunities. Institutions must develop a holistic approach to identify and report fraudulent activities. Coordinate efforts among the operations department, frontline staff, fraud teams, and risk management to educate employees on common fraud trends and patterns. A robust fraud prevention program is essential to identifying and reporting known fraud to the proper authorities. 

Transnational crime organizations (TCOs) TCOs span continents, engaging in multifaceted criminal activities. A robust customer due diligence (CDD) program, aligned with the latest FinCEN advisories, can assist in the early detection of potential TCO affiliations. 

Drug trafficking organization activity – IThe far-reaching implications of drug trafficking underscore its significance. Institutions can curb these illegal operations by refining their monitoring systems and drawing insights from FinCEN advisories. The 2019 FinCEN advisory extensively discusses typologies, case studies, and red flags for DTO activity.

Human trafficking and human smugglingHuman trafficking and human smuggling can be traced and reported by financial institutions taking a vigilant approach to addressing the AML/CFT priorities. FinCEN has published multiple advisories on the human trafficking and human smuggling crisis in the United States. These include typologies and behaviors for financial institutions to look out for during transaction monitoring.

Proliferation financingThis pertains to illicit financing for weapons of mass destruction. Look out for high-risk transfers, adhere to sanctions programs, and keep up with customer due diligence to mitigate risk. FinCEN has issued several counterproliferation advisories related to this activity identifying high-risk countries, including Iran, North Korea, and Syria. 

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Managing AML/CFT priorities

Staying ahead in the dynamic scope of AML and CFT requires constant adaptation. Some priorities are managed by risk management, some by AML/CFT programs, and others by the compliance department. Awareness and coordination of efforts to mitigate risk should be documented within your institution’s AML/CFT risk assessment.

As the AML/CFT priorities are still new in their regulatory framework, the residual risk is most likely considered low to moderate if strong mitigating processes are in place. Financial institutions can better safeguard their operations and contribute to a safer financial ecosystem by embracing the FinCEN Priorities and adapting their risk assessment frameworks. 

Stay up to date on AML/CFT and fraud trends with more professional development.


We can help you navigate changing AML/CFT and fraud regulations. Abrigo's BSA and AML software can help you manage customer or member relationships and stay compliant. Talk to a specialist to learn more.
About the Author

Elissa Brewer, CAMS

Senior Risk Management Consultant
Elissa Brewer is a Senior Risk Management Consultant with Abrigo in the Advisory Services Group. She has over 20 years’ experience working in the financial institution & software industry. She has worked directly with financial institutions and FinTech’s to incorporate manual and automated solutions into their BSA, AML, and Fraud

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About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

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