How often must banks reassess their compliance risk assessments?

Regular reassessment of compliance risk assessments is critical for banks to effectively manage and mitigate risks associated with changes in operations, regulations, or the overall business environment. Conducting these assessments at least annually ensures that institutions remain vigilant and adapt to evolving legal and regulatory requirements.

Additionally, significant changes in operations—such as mergers, expansions, or changes in business practices—necessitate a thorough review to identify any new compliance risks that may arise. Similarly, when regulations change, the ability of a bank to comply effectively can be impacted, warranting a review of their compliance framework. This proactive approach helps banks to maintain compliance standards, identify areas needing improvement, and align their policies with current legal expectations.

By instituting this regular reassessment process, banks can foster a culture of compliance and accountability, reducing the risk of violations that could lead to penalties or fines.