Published on June 25, 2009
BANK Operational Risk Committee MONTH 20XX
AGENDA ‣ Follow up ‣ Excessive Transaction on Savings Accounts (Reg D). ‣ Envios de Dinero Bancomer Discount Transactions ‣ Risk Factors Retail Banking. 2 Risk, 20XX
Follow up 3 Risk, 20XX
Excessive Transaction on Savings Accounts (Reg D). Risks Involved: Operational and Reputational Department Monetary Penalty from Examiners Responsible: 1.-Automatic Notices in production. -Operations. Mmm 20XX 2.-Modify Current Policy and Procedure. ‣ Define control and responsible when the 4th -Operations, Legal excessive transaction occurs. & Compliance. Mmm 20XX‣ Define when the account may be closed ‣ Translation Scripts and Letter ‣ Include Central Operations process -Operations, Retail Banking & 3.-Branch Training. Compliance. Mmm 20XX -Audit & 4.-Follow up review by Internal Audit and Compliance. Mmm 20XXCompliance. 4 Risk, 20XX
Envios de Dinero Bancomer Discount Transactions. Risks Involved: Ineffectiveness in the control of Department operations Potential Economical Loss Responsible: Discount Amount Transactions $XXX $XXX YYY (Mmm-XX / M-mmXX) No Account Holder $XXX $XXX YY YYY Discount Transactions YY YY $XXX YY YYY $XXX $XXX YYY YY YYY $XXX $XXX $XXX YYY $XXX $XXX YY YYY $XXX YYY $- 0 mm-XX mm-XX mm-XX mm-XX mm-XX mm-XX 2.- Incorrect discount of fees to Mexico. - Retail Banking & ‣ Each discount applied in Point of Sale Operations. according operation strategy and policy. 5 Risk, 20XX
Waived Transaction Fees. In the Money Transfer • Action Needed Each discount applied in Point of Sale has to be identified with an account holder. NOTE: Employee with no Bank account input customer ID number. •Why? To identify our Customers and their consumption patterns Marketing Cross selling •When? Effective immediately •How? Click on the Account Holder selection button and input the account number. 6 Risk, 20XX
Retail Banking ‣ Evro Excel tool. ‣ Identification of Risk Factors ‣ Measure Risk ‣ Analysis 7 Risk, 20XX
Retail Banking ‣ Identification of Risk Factors : 40 ‣ Eight Factors had the 80% of the annual impact ANNUAL % DESCRIPTION OF SPECIFIC OPERATIONAL RISK FACTORS DETECTED IN THE BUSINESS UNIT IMPACT Daily Balance process incorrect. The Cash Drawer is short resulting in a charged off. XXX 15% 15% Money Transfer Waived Fee. Incorrect discount of fee. XXX 14% 29% Phone cards reception, sale and shipment. Phone Cards inventory out of control resulting in the loss of phone XXX 11% 40% Cashier Check reception, sale and shipment. Cashier Check inventory out of Control resulting in a potential fraud with the monetary instrument. XXX 11% 51% Deposit Check Incorrect Hold. The Teller does not follow Hold policy and procedure resulting in a loss for the XXX 10% 61% Check Cashing Not sufficient funds Check. The Teller does not follow policy and procedure resulting in a loss for the bank. XXX 8% 69% Deposit Counterfeit Check. The Teller does not verify check's authenticity resulting in a loss for the bank. XXX 6% 76% Phone cards reception, sale and shipment. Phone Cards inventory out of control resulting in accounts XXX 4% 80% Money Transfer incorrect process. The teller types incorrectly the data of the recipient resulting in unrecovered money. XXX 3% 83% Deposit uncollected funds hold Check. The Check was returned because the funds have a hold, resulting in a loss for the bank. XXX 2% 85% 8 Risk, 20XX
Retail Banking ‣ Measure Risk ‣ The total Annual Impact is around $XXX ANNUAL IMPACT XXX RISK CLASS CODE PR - PROCESSES 101 – OPERATIONAL ERRORS PR - PROCESSES 102 – INEFFECTIVE CONTROL EF - EXTERNAL FRAUD 202 - THEFT AND BURGLARY XXX EF - EXTERNAL FRAUD 203 – OTHER EXTERNAL FRAUD BP - BUSINESS PRACTICES 601 - SUITABILITY, DISCLOSURE AND FIDUCIARY XXX IF - INTERNAL FRAUD 301 - THEFT AND FRAUD IT - TECHNOLOGY 401 - TECHNOLOGY AND INFRASTRUCTURE FAILURES XXX XXX XXX XXX YYY YYY RISK CLASS NAME RISK CLASS CODE ANNUAL IMPACT % PR - PROCESSES 101 - OPERATIONAL ERRORS XXX 50.28% 102 - INEFFECTIVE CONTROL XXX 26.54% PR - PROCESSES Total YYY 76.82% EF - EXTERNAL FRAUD 202 - THEFT AND BURGLARY XXX 16.57% 203 - OTHER EXTERNAL FRAUD XXX 5.53% EF - EXTERNAL FRAUD Total YYY 22.10% BP - BUSINESS PRACTICES 601 - SUITABILITY, DISCLOSURE AND FIDUCIARY XXX 0.54% BP - BUSINESS PRACTICES Total YYY 0.54% IF - INTERNAL FRAUD 301 - THEFT AND FRAUD XXX 0.26% IF - INTERNAL FRAUD Total YYY 0.26% IT - TECHNOLOGY 401 - TECHNOLOGY AND INFRASTRUCTURE FAILURES XXX 0.28% IT - TECHNOLOGY Total YYY 0.28% Grand Total YYY 100.00% 9 Risk, 20XX
Retail Banking ‣ Analysis Risk Recurring Damage to Image 22% Sum of ANNUAL IMPACT Very low - Almost no Data ZZZ Sum of RECURRING RISK unit customers are Sum of NON-RECURRING RISK affected. High - Most customers ZZZ 78% are affected. Medium - A significant ZZZ number of customers is Loss Type affected. Data Total Low - A reduced number ZZZ Count DIRECT LOSS RISK 37 DIRECT LOSS RISK Amount $ XXX of customers is affected. Count LOST PROFITS RISK 2 - 5ZZZ 1ZZZ 15ZZZ 2ZZZ 2ZZZ 3ZZZ LOST PROFITS RISK Amount $ XXX Count INDIRECT LOSS RISK 1 INDIRECT LOSS RISK Amount $ XXX 10 Risk, 20XX
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