Magazine article Independent Banker

Risk Watch

Magazine article Independent Banker

Risk Watch

Article excerpt

Key operational and regulatory risk areas that demand attention

As community banks face continued regulatory change and scrutiny, the following operational risk management areas will merit their focus.

» Cybersecurity: As the number and sophistication of data breaches increase, community banks should continue to upgrade their systems to protect their customers from attacks on third-party service providers.

» Regulator Expectations: Your community bank's risk management program should acknowledge that regulators are important "customers" and their opinions must be accounted for in operational processes.

» Risk Culture: Governance, culture and awareness, policies and procedures, and risk appetite are foundational components of an operational risk framework. A supportive risk culture enables the conversation to change from how to fix a specific problem to ing in decision-making and operational processes. »

Bank Secrecy Act, Anti-Money Laundering: As electronic banking becomes more prevalent and fraud becomes more complex, community banks must keep pace in adequately monitoring these activities. Investing in technology, new products and services, BSA/ AML resources and expertise becomes key. »

Change Management: Regulators are increasingly expecting banks to establish an oversight office to govern their change process. At a minimum, your community bank's efforts should include regulatory, operational, technology and strategic initiatives-all Expert have cross-company related risks. …

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