The High Risk Trap in RMCP Models

Many accounting practices discover a strange outcome when implementing their Risk Management and Compliance Programme under the FIC Act. After carefully designing a risk scoring model, almost every client ends up classified as high risk. This usually happens because firms assign too much weight to the services they provide, particularly where company secretarial or TCSP activities are involved. The result is a model that does not distinguish between genuinely higher risk clients and ordinary local businesses. A proper risk based approach should assess multiple factors such as the client profile, geographic exposure, services provided, and transaction behaviour to produce a balanced and practical assessment of risk.