Risk Analysis: Opening Deposit Accounts
In this grid, we lay out risks associated with the branch activity of opening accounts. Whether customers are new or repeat, each of these compliance issues can be triggered. Most of the issues involve disclosures. Disclosures can be prepared using preprinted forms or systems that can generate accurate disclosures while the customer waits. This automation provides a control to protect against violations.
Not everything can be managed with systems. With disclosures goes the necessity to explain. For example, few customers readily understand the concept of transaction limitations or tiered interest. The staffer opening the account will have to explain these terms and answer questions.
In assessing risk, most of the events happen with most new accounts. All disclosure requirements are triggered. Only the less common accounts, such as tiered-rate certificates of deposits, are not a high occurrence. However, the consequences of violations may bear little correlation to the number of opportunities for violations. Some errors, such as Truth in Savings, can be easily remedied (as long as the violation isn't a pattern or practice.) Other problems, particularly those relating to BSA and OFAC, have severe and immediate consequences.
In looking at available controls, the strongest controls are available for the least risky violations - new account disclosures. The weakest controls, those which rely primarily on effective training, apply to the riskiest regulations. This gives clear guidance on where you should concentrate your training efforts.
Risk Analysis Chart (.pdf)
Copyright © 2005 Compliance Action. Originally appeared in Compliance Action, Vol. 10, No. 2, 2/05
|
Print Friendly!
Email This Article!
Discuss NOW!