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Financial sanctions: The pressure is on - Part 1

Updated: Mar 30

Gage your firm’s risk appetite and risk assessment


  • The recent financial sanctions against Russia have far-reaching implications for firms across the globe.

  • It requires urgent reviews of regulated firms’ risk appetite and the processes and controls that manage their businesses within acceptable tolerance levels.

  • These sanctions are likely to also increase regulatory scrutiny and the level of censure for businesses failing to meet expectations.

  • In this first edition of a series of articles, the Lysis Group will provide a breakdown of the practical implications of these sanctions for firms, and how we can assist them to achieve full compliance.


The practical implications


The impacts of the above are increasingly widespread and will influence our world for many years. There are practical implications that will affect the way most firms conduct their business activities, and they would like answers to questions such as, “How close can an individual or firm be to a sanctioned individual or firm and still comply with regulatory requirements?” Also, “Is the general reputational risk of dealing with Russia or sub-parts of the Russian economy simply too high? And again, there is the wider implication of the countries/regions located in the “conflict zone” which raises questions such as “How can we better address this risk as the situation develops?”.


In the business environment this implies that firms must be clear about their risk appetite and keep it under review as the situation develops. The importance of this will depend on each firm’s business model and customer base, but as a discipline, regular review of risk appetite and exposure against that appetite is important.


The day-to-day impact of risk appetite changes can be widespread in a firm’s financial crime framework and include:


  • The need to update the firm-wide risk assessment against the new risk appetite criteria;

  • Changes to the financial crime framework, risk assessment criteria and financial crime policies to reflect changes in risk appetite;

  • Update the management information to inform the executive team and board decision;

  • Uplift to procedures, controls, and systems to reflect revised policies and risk appetite; and

  • Training of personnel to operate within the changed environment.


The Lysis Group has the expertise to assist


Lysis’ experienced team assists firms to design, implement and embed effective financial crime frameworks, to build efficiencies and controls proportionate to the risks. This allows the firm to continue its focus on providing enhanced customer experiences whilst safeguarding its customers, the business itself and its employees.

The Lysis Group can specifically assist with the following areas:


  • Strategy and objectives to manage financial crime and compliance risks;

  • Customer Lifecycle Management design, implementation, and optimisation;

  • The drafting, reviewing, and updating of financial crime and compliance policies and procedures;

  • Financial crime and compliance governance which assist with informing decisions and resolutions;

  • The design of processes, systems, and controls as well as the implementation and optimisation thereof;

  • Providing resources, skilled staff, and culture; and

  • Develop and conduct training on the revised framework, policies procedure and controls.


Gabriel Cozma, Head of Consulting at the Lysis Group concludes by saying “Addressing the emerging risk through quick intervention, as well as continuing to carefully plan and implement a sustainable Financial Crime framework will ensure that you remain effective in managing known and emerging risks and keep the costs of compliance under control. Lysis provides the right blend of skills, expertise, and resources to help you achieve just that”.

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