# What are risk-based approaches?

**URL:** <https://www.amlfaqs.com/t/what-are-risk-based-approaches/197>\
**Category:** Singapore\
**Created:** [October 9, 2024, 9:48am UTC](https://www.amlfaqs.com/t/what-are-risk-based-approaches/197 "2024-10-09T09:48:43Z")\
**Posts on this page:** 2\
**Page:** 1

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**Author:** ![pathik](https://yyz2.discourse-cdn.com/flex010/user_avatar/www.amlfaqs.com/pathik/32/5_2.png) [@pathik](https://www.amlfaqs.com/u/pathik)\
**Post date:** [October 9, 2024, 9:48am UTC](https://www.amlfaqs.com/t/what-are-risk-based-approaches/197/1 "2024-10-09T09:48:43Z")

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What are risk-based approaches?

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**Author:** ![pathik](https://yyz2.discourse-cdn.com/flex010/user_avatar/www.amlfaqs.com/pathik/32/5_2.png) [@pathik](https://www.amlfaqs.com/u/pathik)\
**Post date:** [October 17, 2024, 5:17am UTC](https://www.amlfaqs.com/t/what-are-risk-based-approaches/197/2 "2024-10-17T05:17:26Z")

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A Risk-Based Approach is an important element in the effective implementation of AML compliance where businesses and institutions identify potential risks of money laundering and terrorism financing and develop mitigation strategies, following a ‘higher the risk, higher the control’ approach. This leads to the optimal utilisation of the business or institution’s resources that are proportionate with the magnitude of risk.