What is Risk Management?
It is the assessment of risk throughout an organisation and the development of a strategic and practical plan to minimize and ultimately circumvent exposure to loss.
The process of Risk Management includes identification or discovery of potential risks which are unique to the organisation as well as assessing the severity of the potential loss.
A plan or strategy is then designed and implemented to strenghten aspects of the organisation with the specific aim to reduce the risk. This could range from restructuring internally to making significant changes to the business process of the organisation.
This plan or strategy should be regularily evaluated to determine is performance over time in reducing the identified risk in order to revise and improve the plan further to ultimately eliminate the risk entirely.
What is Money Laundering?
It is the process in which large sums of money are generated by various criminal or illegal activities. These criminal or illegal activities often include drug trafficing, terrorist funding and other illegal activities.
The money generated by these criminal or illegal activities is considered to be “dirty” and is then “laundered”, using various techniques to make it appear to originate from a legitimate source.
The process of “laundering” is neccessary to those involved to enable them to use the money effectively. The most effective way of doing so is by depositing the money in a legitimate financial institution is way way that it appears to have originated from a legitimate source.
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