How to Conduct a Required Bank Risk Assessment: Step-by-Step Guidance

Master Bank Risk Assessments: Essential Steps to Ensure Regulatory Compliance

Federal regulations require banks to conduct periodic risk assessments to identify, evaluate, and document the institution’s risks. The purpose is to ensure the bank can operate safely while protecting its stakeholders’ interests. There are several types of risk assessments, which may be enterprise-wide or focused on specific areas such as BSA/AML/OFAC, cybersecurity, regulatory compliance, data security, etc. Risk assessments are generally conducted in a stepwise manner, starting with selecting the area of focus and identifying the associated risks, analyzing and evaluating specific risks, and controlling and monitoring those risks. Lastly, the findings are communicated to both senior management and the board of directors. Risk assessments are an important tool for helping bank executives make informed decisions about how to mitigate risks effectively before the viability of the institution is threatened.

Regulators encourage every institution to complete risk assessments, acknowledging that “one size doesn’t fit all.” The complexity of a risk assessment depends on the size of the institution, the business focus, and the resources available to conduct the assessment. Regardless of size, regulators require an effective risk management program. This raises several questions: Where do you start? The Board will ask if management is doing its best to identify and manage the bank’s risks. Management may wonder who will conduct the assessment. Does it require a dedicated staff with special expertise? Should the risk assessment be enterprise-wide or focus on a specific area? What are everyone's
responsibilities, from directors to staff? These are a few examples of the questions you’ll have.

Please join Bobby Winstead, a former bank examiner, as he helps you determine the scope of your risk assessment and guides you step-by-step through each stage of the assessment, highlighting key questions to ask at each step along the way.

What You'll Learn:

During this highly informative webinar, our expert speaker will cover:

• The basic concepts of risk assessments as they apply to banking
• The necessary governance, organizational structures, and regulatory requirements, including policies and procedures
• How to organize a risk assessment, including the development of a risk profile
• How controls are used to assess risk
• The importance of control development and testing
• The different types of risk assessments and the key points to consider with each
• The steps in a risk assessment
• Reporting findings to senior management and the Board of Directors

How to Conduct a Required Bank Risk Assessment: Step-by-Step Guidance

Agenda:

A. Risk Assessment Overview

B. Types of Risk Assessments

• Enterprise
• Cyber
• BSA/AML
• Regulatory compliance
• Data security, etc.

C. Risk Assessment Complexity

• Institution Size
• Staffing
• Available Resources
• Internal Staff Versus Outside Consultants

D. Examples of Industry Best Practices and Risk Assessment Standards

E. Risk Assessment Stages

• Areas of focus and identifying the associated risks
• Analyzing and evaluating specific risks
• Correcting and monitoring identified risks
• Communicating findings to both senior management and the board of directors

F. Risk Assessment Governance and Organization

G. Regulatory Requirements—FDIC, FRB, OCC

• Policies and Procedures

H. Determining the Risk Profile and the Importance of Controls

I. Risk Assessment Control Testing and Response

J. Common Risk Assessment Mistakes

K. Risk Assessment Case Study