TraceRiskProduct/Service Failure

Product/Service Failure

Deposit Accounts

Use Case for Assessing Risk on Deposit Accounts

Why assess the risk? Deposits are funds that customers place with the bank and that the bank is obligated to repay on demand or after a specific period of time or after the expiration of some required notice period (e.g. certificate of deposit). Deposits are the primary funding source for most banks and, as a result, have a significant effect on the bank’s liquidity. Errors and omissions and fraudulent alteration of the amount or account number to which funds are to be deposited could result in a loss to the bank. Additionally, uncollected overdrafts, returned items, kiting and other check schemes and frauds can result in losses on deposit accounts.

Who should assess the risks? Chief Operating Officer, Chief Financial Officer, BSA Officer, Compliance 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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Core Compliance

Use Case for Assessing Risk on Outsourced Core Processing

Why assess the risk? Outsourced IT services can contribute to operational risks (also referred to as transaction risks). Operational risk may arise from fraud, error or the inability to deliver products or services, maintain a competitive position or manage information. It exists in each process involved in the delivery of the bank’s products or services. Operational risk not only includes operations and transaction processing, but also areas such as customer service, systems development and support, internal control processes and capacity and contingency planning. Operational risk also may affect other risks such as interest rate, compliance, liquidity, price, strategic or reputation risk.

Who should assess the risks? Information Technology Officer, Data Security Officer, Chief Operating 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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Consigned Items

Use Case for Assessing Risk on Consigned Items

Why assess the risk? Banks still occasionally sell traveler’s cheques and U.S. Savings Bonds. Holding items on consignment or for resale requires stringent physical and inventory controls, as well as prudent dollar limits on inventory. It is essential that the bank minimize its risk by providing proper internal controls, operating procedures and safeguards to protect against claims arising from mishandling, negligence, mysterious disappearance or other unforeseen occurrences.

Who should assess the risks? Chief Operating Officer, Operations Managers, Teller Supervisors, Cash Management 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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