154. While some supervision agencies have dedicated AML/CFT supervision programs and teams, some others conduct their AML/CFT supervision as an (integrated) part of general or prudential supervision program. Both approaches may have pros and cons. For example, in an integrated supervision framework, on-site inspection plans may depend heavily on prudential risks leaving prudentially sound entities with higher ML/TF risks out of the inspection plan, which is not in line with the RBA to supervision. On the other hand, when AML/CFT supervision is conducted on a standalone basis, co-ordination and collaboration with the prudential supervisors and other aspects of supervision is often challenging.

155. Strategies to address this challenge:

• When choosing one of these approaches or a combination of both, authorities should carefully consider these advantages and disadvantages. See the diagram below and please refer to Basel Committee's guidance on coordination between AML/CFT supervision and prudential supervision for further guidance on this topic.

Table 6.1. World Bank comparison of integrated and stand-alone inspections