Risk factors firms should consider when identifying the risk associated with a product, service or transaction’s complexity include:

a) How complex is the transaction and does it involve multiple parties or multiple jurisdictions, for example in the case of certain trade finance transactions? Are transactions straightforward, for example are regular payments made into a pension fund?

b) To what extent do products or services allow payments from third parties or accept overpayments where this is would not normally be expected? Where third party payments are expected, does the firm know the third party’s identity, for example is it a state benefit authority or a guarantor? Or are products and services funded exclusively by fund transfers from the customer’s own account at another financial institution that is subject to AML/CFT standards and oversight that are comparable to those required under Directive (EU) 2015/849?

c) Does the firm understand the risks associated with its new or innovative product or service, in particular where this involves the use of new technologies or payment methods?