Risk Inventory

Risk Inventory is a “fourth” dimension of risk that provides insight into embedded elements of risk that are not specifically covered by a Key Risk Indicator. Subtle risks are inventoried in this way so that they can be studied orthographically. What does that mean? Orthographic representations of risk are from made from the front view (Subjects), the top view (Silos), the end view (COSO), and, from the inside out ( which is ‘Risk Inventory’). Examples of risk inventory are Product Development Risk, Customer Relations Risk, Training & Backup Risk and Denial of Service Risk.

Debit Cards

Use Case for Assessing Risk on Debit Cards

Why assess the risk?   Online debit cards use a PIN for customer authentication and online access to account balance information. At present, financial institutions authenticate customers by matching the PIN with the account number directly through a merchant’s terminal. Banks engaged in retail payment systems should establish an appropriate risk management process that identifies, measures, monitors, and limits risks. Management and the board should manage and mitigate the identified risks through effective internal and external audit, physical and logical information security, business continuity planning, vendor management, operational controls, and legal measures. Risk management strategies should reflect the nature and complexity of the institution’s participation in retail payment systems, including any support they offer to clearing and settlement systems. Management should develop risk management processes that capture not only operational risks, but also credit, liquidity, strategic, reputational, legal, and compliance risks, particularly as they engage in new retail payment products and systems.  Management should also develop an enterprise wide view of retail payment activities due to cross-channel risk. These risk management processes should consider the risks posed by third-party service providers.
Who should assess the risks? Electronic Banking Officer, Operations Administrator, Cash Management/ACH Officer, Chief Financial Officer, Information Technology Officer, Data Security Officer

How to assess the risk: Rate the KRIs to determine if a threat would successfully exploit a vulnerability and to justify expenditures to implement countermeasures to protect the bank’s assets or reputation. Use the “Focus Risk Assessment” tool for in-depth analysis of risks and mitigation techniques.


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COSO Integrated Framework – SOX 404 & FDICIA 112

Use Case COSO Integrated Framework – SOX 404 & FDICIA 112

Use Case: The New COSO Integrated Framework is an important development as it facilitates efforts by banks to develop cost-effective systems of internal control to achieve business objectives and sustain and improve performance. The new version is the predominant method for reporting on the effectiveness of internal control over financial reporting by public companies as required by Section 404 of the Sarbanes-Oxley Act.

Who Should Assess the Risk? Chief Administrative Officer, Chief Operating Officer, Chief Financial Officer, Internal Auditor

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