Which control activities should a risk officer explore to address money laundering risks?

A risk officer addressing money laundering risks should focus on control activities that specifically target the financial aspects of the business and potential vulnerabilities. Vendor risk management is crucial as it ensures that third-party vendors do not pose a risk of facilitating money laundering by verifying their compliance with anti-money laundering (AML) regulations. Cash management is important in handling large amounts of currency and monitoring cash transactions to prevent illegal activities. Whistleblowing activities create a safe channel for employees to report suspicious behavior, which is key to identifying potential money laundering schemes early on.

While employee training and customer service practices are valuable for overall risk management and compliance, they do not directly target the mechanisms of money laundering. Inventory management and sales tracking are essential for operational efficiency but may not adequately address the specific financial risks associated with money laundering. Similarly, market research and consumer feedback are important for understanding customer needs and preferences but do little to mitigate the financial risks posed by potential money laundering activities. Hence, the combination of vendor risk management, cash management, and whistleblowing activities provides a more robust framework to effectively manage and mitigate money laundering risks.