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Ask Hoot-E: Don’t Let Risk Slip Through the Cracks

By Hoot-E posted 05-12-2023 09:13

  

Special thanks to @Jennifer Kline, AAP, APRP, NCP, Director, Audit Services for helping me write this blog!

We talk about ACH Audits and Risk Assessments a lot but it’s also important to remember that conducting audits and risk assessments of EACH PAYMENTS CHANNEL should be an important part of your organization’s risk mitigation program.

By making audits and risk assessment of each payments a priority, you can:

1.  Identify Potential Risks: A risk assessment can identify potential risks in each payment channel, such as fraud, theft, errors or system malfunctions. This allows you to take proactive measures to mitigate those risks before they occur.

2.  Prioritize Risk Management: A risk assessment can help prioritize your risk management efforts by identifying which payment channels pose the highest risk. You can then allocate your resources and efforts accordingly to the channels that require the most attention.

3.  Meet Compliance Requirements: Regulatory requirements often mandate financial institutions to conduct regular risk assessments of their payment channels. Compliance with these requirements can help avoid legal or regulatory penalties and reputational damage.

4.  Build Trust: Account holders trust financial institutions to protect their money and financial data. A risk assessment can help identify potential vulnerabilities in your payment channels, which you can address to enhance security and build customer trust and loyalty.

5.  Prepare for Business Continuity: Risk assessments can help you identify potential vulnerabilities and prepare for potential disruptions in payment channels to ensure continuity of payments services during natural disasters, cyberattacks, system failures and more.

Payments Can Be RISKY Business!
If you’ve got risk on the brain, we’ve got webinars for you! Consider joining us for our upcoming Risk and Fraud in Online Account Opening or ACH Origination Risks & Controls webinars.

Periodic assessments are an important part of risk management for each payments channel and a financial institution’s overall risk management program. Risk assessments should also be conducted prior to rolling out a new payments product or service, such as faster payment, because you need to make sure you have controls in place to mitigate what you identify as risks, and to highlight any areas you may need improvement.

If you can’t remember when you last conducted an assessment of your wire, RDC, RTP or ACH payments OR you plan to roll out FedNowSM or another new payments service soon, it might be time to give us a call! Our payments experts are well-versed in payments risks across the payments channels and we’re standing by to help answer your questions, point you in the direction of a helpful checklist or workbook or conduct the service for you.

Click here to get in touch with our Audit & Advisory team. We hope to hear from you soon!

Let’s Work Together on Compliance!
The key to compliance is not only learning rules and regulations but understanding what they say and how they might affect you. Our two-day Payments Compliance Workshop will cover a variety of rules, regulations and guidance that govern the payments industry. Join us to gain a better understanding of the impact of common compliance considerations on your organization. Register now!


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