Washington Bankers Association Executive

Transcript:Washington Bankers Association Executive:
Washington Bankers Association Executive Development Program Audit and Compliance Risk Management: The Continuous Program Cycle Presenter: David McCrea U.S. Program Manager Global Regulatory Compliance Team Infosys Limited Investors Government Media Environment Business Changes Community Legal Issues Competition Influences Assess Risk Refine/Establish Strategy, Goals & Objectives Refine/Establish Control Environment Report Results Measure Performance Through Testing/ Monitoring of Control Environment Take Corrective Action Senior Management Business Compliance Board/Audit Assess Risk Assess Risk Assess Risk Assess Risk Risk Management Process Ownership The Continuous Program Cycle Setting Strategy and Structure Strategic Planning = the art and science of determining where an organization is going and how it’s going to get there. Setting Strategy and Structure What is management’s risk appetite? Risk tolerant? Risk averse? Somewhere in between? Setting Strategy & Structure Vision Statement – aka – Mission Statement A brief “big picture” description of your compliance program purpose and method. Setting Strategy and Structure Setting goals and objectives: Goals are observable and measurable overall end results, and Objectives are the steps to achieve specific results within a fixed time frame. Compliance Department goals Business Unit compliance goals Company Goals Setting Strategy and Structure Defining a structure – roles and responsibilities Compliance and Audit responsibility ultimately lies with the board of directors Executive management needs to set the tone Compliance/Risk Management provides the expertise and advice The business units have responsibility to “do” risk management Setting Strategy and Structure Defining a structure Compliance/Audit/Risk Management department configurations: Solo; Committee; Numerous specialists; Outsourcing; Others? (What about the centralized – decentralized continuum?) Setting Strategy and Structure Defining a structure - continued Bank’s asset size; Number of employees; Number of branches and locations; Product mix; Services; Other? Risk Profile (coming soon…) Setting Strategy and Structure Defining Scope What do you cover? What do you NOT cover? BSA? Fair Lending? CRA? SOX / BASEL? Info Sec? Loan Review? Other? Ensure coverage for all out-of-scope functions. Assessing Risks Risk identification Risk types Risk ranking Controls Effectiveness Risk Identification The detection and analysis of potential risks that may prevent the achievement of the bank’s objectives What type of products and services does the bank offer? What types of systems does the bank have in place and to what extent are processes automated? What is your charter structure(s), who is/are your regulator(s)? What regulations apply to the above? Forms of Assessment Risk assessments can take many different forms and have different purposes: Product/Service