Risky Business
A chance that actual outcomes differ from the expected
What is Risk?
In the 3 Lines of Defense, they have the primary responsibility to own and manage risks associated with day-to-day operational activities
Who is the First Line of Defense?
An identified control gap or weakness where a control is either not in place or the design and/or performance of the control has been shown to be ineffective in mitigating operational risks to an acceptable level
What is an Issue?
A person or body that supervises a particular industry or business activity
What is a Regulator?
The segregation of duties such that one individual may initiate a transaction while a second individual may verify, approve, and/or release it
What is Dual Control/maker-checker/secondary review?
This financial product or service offers financial protection against potential losses or risks in exchange for paying a premium
What is Insurance?
They are comprised of various risk management and compliance functions to help build and/or monitor the first line-of-defense controls
Who is the Second Line of Defense?
Competing interests that may compromise impartiality in decision-making
What is a conflict of interest?
The independent bureau within the US Treasury that supervises national banks, federal savings associations, and federal branches and associations of foreign banks. It is the primary regulator of banks chartered under the National Bank Act and federal savings associations chartered under the Home Owners' Loan Act.
What is the OCC?
A quantifiable metric used to assess the performance of a department or organization
What is a KPI?
A type of risk that a business faces in its day-to-day activities which can result from breakdowns in internal procedures, people, systems and external factors
What is Operational Risk?
Visual representation of a workflow or process to understand its steps and interactions efficiently
What is a process map/flow/model?
Dealings or transactions that an individual engages in, which could potentially create a conflict between their personal interests and their professional duties or responsibilities.
What are personal financial transactions (PFT)?
A federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United States
What is the DOJ?
A helpful reminder to ensure that all tasks have been completed at the end of the day
What is a checklist?
A common intake channel or avenue to report ethical violations without fear of reprisal
What is a whistleblowing / whistleblower hotline?
Designed and operated to mitigate risks through preventative, detective and directive means
What is a Control?
A range of approaches, tools and techniques used to uncover the deeper problem, rather than only fixing the symptoms, to address the primary cause and reduce the likelihood that it will happen again
What is Root Cause Analysis?
A private US government-authorized not-for-profit organization that acts as a self-regulatory organization that regulates member brokerage firms and exchange markets
What is FINRA?
The creation and application of technology to monitor and control the production and delivery of products and services
What is Automation?
A systematic process used to determine if a product or service meets quality standards
What is Quality Assurance?
A document that provides directions and instructions as to how teams and members within an organization must go about completing certain processes
What is a procedure/SOP?
Matters that are important and that the Federal Reserve is expecting a banking organization to address over a reasonable period of time
What is Matters requiring attention (MRA)?
The body responsible for regulating the conduct of 50,000 firms in the UK to ensure that financial markets are honest, competitive and fair
What is the Financial Conduct Authority (FCA)?
The set of standards used within the investment and financial services industry to verify customers, their risk profiles, and financial profile
What is Know Your Customer (KYC)?