Risk is in the Eye of the Beholder

In the world of check cashing and money services businesses (MSBs), one of the most important, and often misunderstood, concepts is risk. Regulators and banks use the term constantly, compliance officers evaluate it daily, and yet for front-line MSB employees, “risk” can often feel vague or subjective. That’s because risk is, in many ways, in the eye of the beholder.

Consider the requirement to file a Suspicious Activity Report (SAR) when a transaction “has no apparent lawful purpose.” That phrase sounds clear on paper, but in practice, it’s anything but. What appears unusual to one teller may seem ordinary to another. A pattern of transactions that looks routine for one type of business could raise serious questions in another.

This is why it’s not enough for MSB operators and their staff to treat compliance as a box-checking exercise. Instead, they need to understand why risk is subjective and how to approach it with the right mindset.

Why Subjectivity Matters in Risk Assessment

When regulators and banks review MSB activity, they aren’t simply looking at whether forms were filled out correctly or whether thresholds were met. They are looking for whether the MSB exercised reasonable judgment in evaluating the activity they handled.

For example, a construction company cashing multiple large corporate checks might be entirely normal in Miami or Houston, where the industry thrives. But if a similar pattern appeared from a business that doesn’t appear to have heavy payroll or contracting activity, the same transactions could raise red flags.

The risk isn’t in the transaction itself, it’s in the context. And that context is where subjectivity comes in.

The Role of MSB Employees in Defining Risk

Every compliance manual and every AML/BSA training module will emphasize this: front-line employees are the first line of defense in detecting suspicious activity. But here’s the challenge — your employees can only make sound judgments if they are trained to ask the right questions.

When a transaction seems unusual:

• Does it align with the type of business the customer is in?

• Is the check volume or cashing frequency consistent with their industry?

• Is there a legitimate business explanation, or does the activity appear structured to avoid reporting thresholds?

Transactions that “have no legitimate business purpose” are often just misunderstood transactions. Asking questions and documenting the answers is what transforms a potential red flag into a clarified, legitimate transaction.

Why a Qualified Compliance Resource Matters

Here’s where many MSBs fall short: relying only on internal staff. Even the most diligent employee can miss a pattern, overlook a red flag, or misjudge whether an activity is suspicious. Having a qualified compliance resource as another set of eyes makes all the difference.

At ComplyCheck, we bring perspective that goes far beyond any single MSB’s daily experience. We work with over 100 MSBs across the U.S., meaning we see a wider array of transactions, customer activity, and regulatory responses than any one operator possibly could.

That perspective matters. Because what might look like a one-off anomaly to your staff may be something we’ve seen play out across dozens of other businesses. With that broader context, we can help you distinguish between activity that’s truly suspicious versus activity that simply requires clarification. In other words, we look at your transactions not just in isolation, but in the bigger picture regulators themselves are trained to see.

Why Training and Oversight Are Critical

For MSBs, the gray area of subjective risk is where the greatest vulnerabilities lie. This is also where regulators and law enforcement focus their attention. If your employees fail to recognize or escalate potentially suspicious activity, you expose your business not just to fines, but to reputational damage, fines and possible loss of your check cashing license.

That’s why regulators require AML/BSA training for MSB employees. It’s not enough to know the rules,  your staff must understand how to apply judgment in real-world situations. Adding in the oversight of an outside compliance resource ensures your judgments stand up to regulatory scrutiny.

Where ComplyCheck Comes In

At ComplyCheck, we understand that “risk is in the eye of the beholder.” We also understand how costly it can be if your employees don’t see what regulators expect them to see.

That’s why we provide:

• Customized MSB training designed for front-line employees who face these subjective decisions every day.

• Independent reviews of your AML/BSA compliance program, offering that extra set of eyes to validate your risk assessments and other decisions.

• Ongoing transaction monitoring and corporate file management so you can focus on running your business while we make sure nothing slips through the cracks.

Final Thought

Risk will always be subjective. What matters is whether your MSB is applying consistent, well-documented judgment to each transaction and whether you have the right resources in place to challenge, validate, and strengthen that judgment.

By training your employees, asking the right questions, and leveraging a qualified compliance resource, you can demonstrate to regulators and banks that you are taking risk seriously.

Don’t wait until a regulator tells you your program isn’t good enough. Contact ComplyCheck today and let us provide the perspective and expertise your business needs to stay ahead of risk.