September 21, 2016 Disclaimer: These views are those of the - - PowerPoint PPT Presentation

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September 21, 2016 Disclaimer: These views are those of the presenter and not necessarily those of the Federal Reserve Bank of Boston, or the Federal Reserve Board. Effectiveness of Controls/ Residual Risk/ Inherent Risk Mitigating Risk

SLIDE 1

September 21, 2016

Disclaimer: These views are those of the presenter and not necessarily those of the Federal Reserve Bank of Boston, or the Federal Reserve Board.

SLIDE 2

 Can incorporate OFAC or conduct separate OFAC risk assessment

Inherent Risk Effectiveness of Controls/ Mitigating Controls Residual Risk/ Risk Rating

Products
Services
Customers
Geography
Branching
Transactions
Automated

systems

Manual

processes

Policies/

procedures

Recent

audit/exam results

Staffing

Well-supported and documented methodology

SLIDE 3

 Use of automated systems vs. manual processes  Changes to systems/processes  Customer acceptance  Reconciles with controls/mitigates detailed in the

risk assessment

 Level of reliance on staff outside of BSA

department

SLIDE 4

 Frequency  Areas covered  Methods  Business Units/Personnel/ BOD  Changes to or significant procedures

SLIDE 5

 Scope

All higher risk areas?

 Depth of transaction testing

Quantity and quality

 Frequency of audits

More frequent or focused audits if necessary based on

risk?

 Unusual circumstances

M&A; system conversions

SLIDE 6

 Risk Assessment  Policy  Audit and exam results  Suspicious Activity  CTR volume  Customer profile/base  Training efforts  New regulations

SLIDE 7

 Contact information:

Gabriela Webber
Federal Reserve Bank of Boston
600 Atlantic Ave, Boston, MA 02210
(617) 973-3377
Gabriela.Webber@bos.frb.org

 Federal Reserve System Community Banking

Connections, "Assessing Inherent BSA/AML Risk at Community Banks”, Third Quarter 2013

https://www.communitybankingconnections.org/articles