At NACHA’s Payment 2013, I assisted Michael DeBroeck from INTRUST Bank, Wichita, KS, with a breakfast Roundtable discussion, Reporting ACH Results to the Board. The participants that joined us were from small to medium sized FIs throughout the U.S., Iowa, New York, North Carolina, Oregon, Wyoming and Wisconsin. Those participants had the same questions and concerns that we do in EPCOR’s territory. What should be reported to the Board, and how can we get lenders to take an active role in ACH Origination?
A medium-size bank in Wyoming began to report ACH activities to the Board several years ago, and now reports on an annual basis. However, the Board’s interest in ACH has faded. This bank is looking for ideas on how to engage the Board in ACH again. Another bank in Oregon, reported the results on the ACH Risk Assessment to the Board. The Board sent the assessment back to operation staff because the 150-page risk assessment manual was too much information.
Another discussion point was raised regarding lenders. How can operations / cash management staff get lenders, (who have the knowledge of customer’s financial needs and who can adequately conduct due diligence on an ACH customer) to understand the significance of exposure limits? Our participants expressed that many times when an exposure limit is exceeded, that the lender will either approve the file without Originator due diligence, or ignore the request for approval of exceeded exposure limits.
EPCOR has heard these questions and concerns from members for many years. Some suggestions to keep the Board engaged in ACH are to do trend analysis of ACH volumes, preferably by each quarter. Also, use charts or graphs to show increases, or decreases, in ACH activities. A static number of overall ACH volumes are informational, but not engaging for the Board. Show the activity, the ups and downs on a graph may encourage to Board to ask more questions about receiving ACH, originating ACH or even a specific Originator or Third-Party Sender.
For the ACH Risk Assessment reporting to the Board, the final report with action plans for resolution will give the Board a quick snapshot of your ACH activities and risk.
As for engaging lenders in ACH, that’s another topic worthy of its own blog. Stay tuned for more on that.