Customer Risk Assessment, Rating, and Monitoring


Presented by:
Ken Golliher

Along with their formal risk assessments, banks are being asked for a "list of bank identified high risk accounts" prior to their on-site examinations. The connection? It's impossible to do the risk assessment without first identifying high risk customers.

Revised examination procedures no longer contain a list of "high risk businesses;" regulatory agencies no longer enforce the concept that any business automatically has a scarlet "HR" tattooed on its chest. Instead, banks are expected to identify their own high risk customers one at a time. Any bank's "high risk" designations should be tagged with higher documentation and monitoring requirements, both of which generate direct expenses to the bank.

Banks act on a regulatory imperative when they identify their high risk customers. However, they have an economic incentive to be realistic when they do it.

Appendix J from the recently revised examination procedures indicates a critical component of the bank's risk assessment is the number of high risk customers it has. As that number rises, so does the bank's overall risk rating.

This webinar focuses on developing a system for risk rating consumer and business customers. In particular, the program focuses on risk rating business customers on factors such as:

  • Form of organization
  • Line of business
  • Activity
  • Geographic connections

  • Identifying high risk customers at account inception
  • Identifying high risk customers based on activity
  • Developing a customer risk assessment
  • Developing and maintaining a customer profile
  • Effect of high risk customers on the bank's risk assessment
  • Do we risk rate all customers or just identify those that are high risk?
  • What are appropriate monitoring levels; i.e. frequency vs. breadth?
  • How much assistance can our standard data processing system and reports provide?

    The program is designed for operations personnel as well as BSA officers and auditors employed by banks, thrifts and credit unions. It focuses on specific elements of Bank Secrecy Act compliance and compliance management, not the regulation in its entirety.

    (requires Windows Media Player and IE).

    About the speaker:
    Ken Golliher is a principal with Pegasus Educational Services, LLC, a training firm headquartered in Louisville, Kentucky. He is an experienced banker with a unique ability to reduce complex legal concepts to plain English. He has explained the "why" and "how" of regulations to thousands of financial institution personnel and examiners. Ken's banking career began in 1972 and includes serving as a teller, commercial operations manager and as trust department legal counsel in a state and a national bank. For ten years he headed the education division of a regional consulting firm for financial institutions. He has served on the faculty of the LSU Graduate School of Banking, the OTS' Level I Compliance School and the FDIC's Advanced Consumer Protection School for examiners. He has presented seminars in more than 25 states and has served as an instructor at compliance schools sponsored by the Illinois, Indiana, Georgia, Kansas, Kentucky, Nebraska, Pennsylvania and Texas bankers associations. He is one of the moderators for the Bank Secrecy Act forum at

    CD-ROM includes:

    • Complete presentation (including slides and audio)
    • Written Materials
    • Follow-up Q & A

    You have the right under this license agreement for this CD-ROM to use this presentation on a single-workstation. Use on a network is in violation of the copyright agreements. CD may be used by multiple users at a given institution but may not be placed on a network or in any other multi-user environment. 

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    • Model: cd_risk1006
    • Manufactured by: Glia Group, Inc.

    This product was added to our catalog on Monday 28 November, 2005.

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