For example, for the various technological options, management should assess the risks associated with how and where nonpublic personal information is captured, transmitted, retained, and destroyed. RDC agreements should establish the control requirements identified during the risk assessment process and the consequences of noncompliance. Here are some helpful hints* on a few of the basics: In a nutshell, that you are responsible for monitoring suspicious activity just as you would with any other type of transaction, and that failing to take reasonable precautions exposes you to fines and other penalties. Advisor can help the bank to meet these compliance requirements by verifying that deposits are coming from the location that the business registered with the bank. For nearly 30 years, Fisher has worked in the financial industry using technology to improve the bottom line. And I am talking about MONEY LAUNDERING risks - not fraud risks (i.e. Contracts and agreements should be appropriate for the institution's specific RDC environment and should identify clearly each party's roles, responsibilities, and liabilities.

In particular, the growing use of RDC by foreign correspondent financial institutions and foreign money services businesses to replace pouch and certain instrument processing and clearing activities raises money laundering risks the institution should understand and mitigate. The purpose of the act and subsequent regulations relate to the information and how the information is considered beneficial in investigations of criminal wrongdoing, tax code or regulatory violations. Franking involves printing or stamping such phrases as "Processed" or "Electronically Processed" on the front of the original check. Website Design by Haley Marketing, Tampa FL Anti Money Laundering Recruitment, The Gold Standard: Putting Quality Over Quantity in Your Hiring Pool, The Unfriendly Specter of ‘Ghosting’ in the Workplace, Spotting the Purple Squirrel: Retained Searches for Finding “Secret Stashes” in Talent. RDC can decrease processing costs, support new and existing banking products, and improve customers' access to their deposits; however, it introduces additional risks to those typically inherent in traditional deposit delivery systems. The Management Booklet of the FFIEC1 IT Examination Handbook and the FFIEC Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual provide high-level descriptions of risk management processes that include planning, risk identification and assessment, controls, and measuring and monitoring.2. Over the past few years, we’ve gotten a lot of questions from the banks and credit unions we serve about what we can do to help them comply with rules set down by various regulatory bodies including the FFIEC, OFAC, FinCEN, OCC, FDIC, and others. & FFIEC Compliance Our main hardware-specific tool for this purpose is Advisor by Digital Check®, a geolocation service that can track the physical location where deposits originate and flag suspicious activity. It may also prompt a phone call or visit to the business should the deposit location change. Privacy Policy

This will help ensure that the monitoring and reporting process accurately reflects current policies and procedures and sound practices. Management should assess carefully how RDC affects existing risks and mitigating controls. FFIEC Information Technology Examination Handbook. More micro businesses are expected to use RDC in coming years, … Remote Deposit Capture (RDC), a deposit transaction delivery system, allows a financial institution to receive digital information from deposit documents captured at remote locations. In addition, original deposit items are not typically forwarded to banks, but instead the customer or the customer’s service provider retains them. Remote deposit capture emerged as an unintended consequence of the Check Clearing for the 21st Century Act and is growing in popularity. 10 See FRS: SR 05-19; FDIC: FIL 103-2005; NCUA: LTCU 05-CU-18; OCC: Bulletin 2006-35; OTS: CEO Memo 228. This webinar is sponsored by. A continuous reporting process that will identify and inform the organization immediately of suspicious activity.

Financial institutions will probably stop accepting investments in image ATMs due to the growth in mobile RDC. Does it require us to do anything specific? Assess the adequacy of the bank’s systems to manage the risks associated with electronic banking (e-banking) customers, including Remote Deposit Capture (RDC) activity, and management’s ability to implement effective monitoring and reporting systems. The inventory of other assets for sale -- including office furniture, fixtures, and equipment. A financial institution offering RDC should have sound risk management and mitigation systems in place and should require adequate risk management at customer locations. May be used by a "front" company or unknown third party. Another major national bank took a $50 million penalty and $110 million in forfeitures from the OCC, FinCEN and DOJ, also triggered in part by foreign RDC transactions. If you jumped to the cloud at the beginning of the COVID-19 pandemic, without much long-term planning, take some time now to ... Set your organization up for a successful cloud deal.

All booklets that compose the handbook are available at http://www.ffiec.gov/ffiecinfobase/index.html. Comprehensively identifying and assessing RDC risk prior to implementation. One major bank was hit with an $8 million fine by the OCC and FinCEN in 2011, partly over monitoring of RDC transactions involving foreign correspondents. These locations may be the financial institution's branches, ATMs, domestic and foreign correspondents, or locations owned or controlled by commercial or retail customers of the financial institution. These controls should be designed and implemented to ensure the security and integrity of nonpublic personal information throughout the transmission flow and while in storage. FFIEC: Guidance Addressing Risk Management of Remote Deposit Capture Activities, FFIEC: BSA/AML Examination Manual Strong, well-constructed contracts and customer agreements are critical in mitigating the financial institution's risks. the FFIEC Web site. Although deposit taking is not a new activity, RDC should be viewed as a new delivery system and not simply as a new service. Senior management should identify and assess exposure to legal and compliance risks related to RDC. If you wish to opt out, please close your SlideShare account. Ineffective controls at the customer location may lead to the intentional or unintentional alteration of deposit item information, resubmission of an electronic file, or re-deposit of physical items.
The financial institution should consider applicable Federal Reserve Operating Circulars and governing agreements of relevant third parties involved in their check processing operations (e.g., Electronic Check Clearinghouse Organization [ECCHO]). Save-Guarding Your Innovation Landscape: Outsource Innovation and Channel Rev... Особенности внедрения РРО в чешском e-commerce, No public clipboards found for this slide, Remote Deposit Capture Risk Management & FFIEC Complaince. In broad terms, RDC allows a bank’s customers to scan a check or monetary instrument, and then transmit the scanned or digitized image to the institution. A variety of reports can facilitate management oversight of RDC operations, customer compliance with agreements or contracts, and instances of anomalous or questionable activity.

Examples of higher risk parties include online payment processors, certain credit-repair services, certain mail order and telephone order companies, online gambling operations, businesses located offshore, and adult entertainment businesses. Ensuring that RDC customers receive adequate training. Some financial institutions may involve third parties in the risk assessment, implementation, or ongoing operations to provide additional expertise. This guidance addresses the necessary elements of an RDC risk management process in an electronic environment, focusing on RDC deployed at a customer location.

Carrubba cautions institutions using RDC for customers located in foreign countries depositing checks drawn on domestic institutions, particularly instruments such as official checks, money orders and traveler's checks that are known vehicles for money laundering. 6 When a financial institution sends a check for collection or presentment, it makes warranties and takes on liabilities with respect to that check under Regulation CC, state law (the Uniform Commercial Code), and, if it sends the check to a Federal Reserve Bank, Regulation J. RDC also supports new and existing banking products and improves customers’ access to their deposits. The training should include documentation that addresses issues such as routine operations and procedures, duplicate presentment, and problem resolution.
5 Refer to the FFIEC Check 21 InfoBase for additional discussion of the Check 21 Act and the responsibilities associated with substitute checks at http://www.ffiec.gov/exam/check21. Several other banks large and small have been slapped with warnings and cease-and-desist orders over similar remote deposit problems. Many teams have been separated for most of the year, but are they communicating effectively?