Which item is used to characterize transactional risk in CRR: Transactional?

• A. International Activity
• B. Cash Intensive
• C. Primary Counterparties
• D. Volume / Frequency

Answer: (D)

Transactional risk is driven by how much activity flows through an account and how often it occurs. In the CRR framework, the transactional risk dimension is assessed using Volume and Frequency—higher transaction counts and more frequent activity increase the potential for money movement schemes and red flags, so they signal greater risk. The other factors reflect different risk areas: international activity points to geographic risk, cash-intensive operations relate to the business model and cash handling, and primary counterparties concern counterparty-related considerations. Therefore, Volume / Frequency is the best descriptor for transactional risk. For example, a customer conducting many transfers daily to various destinations would raise transactional risk more than someone making a single monthly payment.