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Compliance Risk Assessments are not a regulatory requirement but the absence of or deficiencies associated with risk assessments are often identified as the root cause of many issues or findings addressed in examination reports and enforcement actions. Banking examination manuals and handbooks for all regulatory agencies repeatedly point out that banks are expected to be aware of the most significant compliance risks to the bank and to their customers and consumers. Banks are expected to have adequate controls in place to mitigate these risks, once they are identified, and to ensure that compliance risk is adequately managed to a level satisfactory to the bank’s Board’s risk profile.
On a periodic basis, likely annually unless there are significant changes such as the introduction of new products, exam and audit findings, etc., the Board should require management to identify and assess the principal compliance risks applicable to all business units and/or activities within the bank and to formally determine whether controls, such as policies and procedures, training, monitoring systems, etc., are being properly developed and maintained to identify, measure, monitor and mitigate the key risks identified.
This recording identifies the regulatory guidance that is directed at banks and the risk management methodologies utilized by regulatory agencies as they develop their initial risk profile of the bank.
A risk assessment is the first step in determining the focus and parameters of the bank’s monitoring program as well as determining the scope and coverage of its compliance audit program for at least the next 2 years. The results cover, identify and document all applicable federal/state laws or regulations and regulatory guidance for each business unit as well as at the enterprise-wide level.
While there is no one size fits all risk assessment methodology, the key is to arrive at a detailed analysis of the level of inherent compliance risk (before controls are factored in) for each applicable law or regulation, or by business unit or function, including the effectiveness of the compliance risk controls to measure, monitor and mitigate identified risk(s). The resulting residual risk ratings will contain recommended corrective action(s) designed to reduce residual risks to a level that is within the Board’s acceptable risk tolerance.
You will receive a detailed manual and PowerPoint slides that serve as a valuable resource long after the conclusion of the recording which will serve as a vital resource in developing or enhancing the bank’s compliance risk assessment.
Upon completion of the program participants understand regulatory expectations regarding:
- Difference between and expectations of internal vs external risk assessments;
- How to identify and measure inherent (environmental) and residual risks;
- How to identify all internal or external processes or functions considered Controls;
- Independence and knowledge level of personnel performing the risk assessment;
- Development of framework for scoping, identifying, assessing, testing, monitoring, and reporting; and
- What should be documented and reported versus addressed informally.
The recording is designed for Risk Officers, Compliance Officers, BSA Officers, Fair Lending Officers, Auditors and supporting staff members.