# What is risk-based technique?

**URL:** <https://www.amlfaqs.com/t/what-is-risk-based-technique/198>\
**Category:** Singapore\
**Created:** [October 9, 2024, 9:50am UTC](https://www.amlfaqs.com/t/what-is-risk-based-technique/198 "2024-10-09T09:50:05Z")\
**Posts on this page:** 2\
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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, 9:50am UTC](https://www.amlfaqs.com/t/what-is-risk-based-technique/198/1 "2024-10-09T09:50:05Z")

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What is risk-based technique?

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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, 5:19am UTC](https://www.amlfaqs.com/t/what-is-risk-based-technique/198/2 "2024-10-17T05:19:28Z")

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A Risk-Based Technique adopted by financial institutions and business entities in Anti-Money Laundering (AML) compliance is commonly referred to as a Risk-Based Approach (RBA) that involves:

- Identifying the inherent risk to the business or institution
- Defining business or institution’s risk appetite
- Implementing proportionate risk mitigation measures
- Determining residual risk or net exposure
- Periodic review of the Risk-Based Approach adopted by the business or financial institution

Visit this illustration to learn more about the Risk-Based Technique or Risk-Based Approach

> **[Cyclical Process of Risk-Based Approach: Important to Combat Financial Crime](https://amlsingapore.com/cyclical-process-of-risk-based-approach/)**
>
> Here is an infographic elaborating the Cyclical Process of Risk-Based Approach, which the regulated entities must understand and implement to safeguard the business.