First line of defense: Owns and manages risks/risk owners/managers. Second line of defense: Oversees risks/risk control and compliance. Third line of defense: Provides independent assurance/risk assurance.
The “Three Lines of Defense” describes how financial institutions should manage and structure their anti-money laundering and counter-terrorist financing (AML/CTF) risk. Firms can use this framework to mitigate risk management gaps and duplication of unnecessary risk coverage.
Four pillars of an AML/Counter-Terrorist Financing (“CFT”) program include a system of internal policies, procedures and controls (the first line of defense), a designated compliance function with a compliance officer (the second line of defense), an independent audit function to test the overall effectiveness of the ...
As part of the first line of defence, policies and procedures should be clearly specified in writing, and communicated to all personnel. They should contain a clear description for employees of their obligations and instructions as well as guidance on how to keep the activity of the bank in compliance with regulations.
What is the second line of defence? The second line incorporates the chief AML/CFT officer – typically the money laundering reporting officer (MLRO), CF11 under the Senior Managers and Certification Regime – and the compliance and risk functions.
The second line of defense are the non-specific phagocytes and other internal mechanisms that comprise innate immunity.
The human body has three primary lines of defense to fight against foreign invaders, including viruses, bacteria, and fungi. The immune system's three lines of defense include physical and chemical barriers, non-specific innate responses, and specific adaptive responses.
The second line of defense is managerial and is responsible for oversight of the doers. They also develop and implement risk management processes, policies and procedures. The third line of defense are the auditors, both internal and external, who independently assess and report on the work of the other two lines.
Critics of the 3LoD model say it is over-simplified, outdated, and no longer a good representation of how companies should assign responsibilities for risk management activities.
The Three Lines Model is a fresh look at the familiar Three Lines of Defense, clarifying and strengthening the underpinning principles, broadening the scope, and explaining how key organisational roles work together to facilitate strong governance and risk management.
First line: Primary responsibility for managing organisational risks through designing and implementing appropriate mitigating controls rests with operational management who own and manage risks.
The first line of defence (or outside defence system) includes physical and chemical barriers that are always ready and prepared to defend the body from infection. These include your skin, tears, mucus, cilia, stomach acid, urine flow, 'friendly' bacteria and white blood cells called neutrophils.
First line of defense is also known as innate immunity. This immune system follows the non-specific form of defense mechanism against the pathogen. Second line of defense is also known as adaptive immunity. This immune system produces an immune response at the time when the human body is exposed to pathogens.
What is the body's third line of defence against pathogens? The third level of your immune system consists of cells tailor-made to get rid of the specific microorganisms that have invaded your tissue. Special cells called dendritic cells are the liaison (point of communication) between innate and adaptive immunity.
The first line consists of the organisation's frontline staff. They are charged with understanding their roles and responsibilities and carrying them out correctly and completely; The second line is created by the oversight function(s) made up of risk and compliance management.
The innate immune system: Fast and general effectiveness
The innate immune system is the body's first line of defense against germs entering the body. It responds in the same way to all germs and foreign substances, which is why it is sometimes referred to as the "nonspecific" immune system.
Inflammation. The body's second line of defense against pathogens includes the inflammatory response.
Fourth line: assurance from external independent bodies such as the external auditors and other external bodies. External bodies may not have the existing familiarity with the organisation that an internal audit function has, but they can bring a new and valuable perspective.
2. Layering. Once the money has been put in place, the second stage is called layering or structuring.
Second Line: The second line of defense is the financial institution's compliance- and risk-related functions. They are responsible for providing guidance and oversight of the first line of defense.
The third line is comprised of independent assurance providers. These groups report independently to the board or the audit committee and include functions such as internal audit, external auditors, a Chief Risk Officer and special/ad- hoc committees.
Last Line of Defense is overdraft protection for your debit card. It allows you to purchase that item, even if you don't have the funds in your account. It is really protection when you need it.