Independent Banker - April 2017 - 67

fraudulent transactions.
» Consumer education about privacy
and cybersecurity is paramount
to protecting private personal
information.
For more information, refer to the
FFIEC's Information Technology
Examination Handbook and related
booklets (ithandbook.ffi ec.gov/itbooklets.aspx).
You can fi nd specifi c
guidance related to mobile banking
risk mitigation in Appendix E of the
Retail Payment Systems booklet.
Ongoing security testing and
monitoring are essential to a successful
product, and third-party security
experts may be needed.
________________
_________
MYTH: We haven't offered electronic
account access because
customers in smaller communities
like ours wouldn't want it.
FACT: The internet is
everywhere, and it touches
communities large and small, rural
and urban. Churchill says, " Perhaps a
bigger myth is that 'mobile is only for
Gen X and the millennials, and my
older customers won't use it.' " The
2016 Digital Banking Report found 52
percent of people age 45 to 60 and
over use mobile banking; in 2013, it
was only 34 percent.
" Intergenerational communication
via tablets and smartphones is driving
familiarity: think grandchildren
interacting with baby boomers, "
Churchill adds. " Mobile devices have
irrevocably changed the banking
industry. Branch traffi c has continually
decreased, and your bank's app is
your front door. "
MYTH: The BSA/AML customer
due diligence rules that will
become effective in May 2018
are of no concern. We already
have a customer vetting process
in place.
FACT: The new rules (see next
month's Independent Banker)
require fi nancial institutions to
implement procedures for
developing a customer risk profi le
and perform ongoing customer due
diligence (CDD), including
identifi cation of benefi cial owners, to
effectively monitor for suspicious
activity. The rules also must be
documented in the bank's BSA/AML
program as a " fi fth pillar. "
" The impact of the new CDD rules
on community banks will vary based
on the health of the bank's current
CIP [Customer Identifi cation
Program] procedures and overall
compliance program, " advises Laura
Marshall, partner, Hunton & Williams
LLP. " Many community banks
are already in the habit of inquiring
as to benefi cial ownership for business
customers, and they will need
to be sure that the information currently
being collected is consistent
with new regulatory requirements.
For others, the new rules present an
opportunity to revisit their existing
CIP and monitoring procedures and
make enhancements. It is diffi cult to
effectively manage risk, unless you
have CIP procedures at the front
end that essentially block would-be
money launderers at the outset. "
Although it can be easiest to take a
conservative approach to compliance,
the most successful banks actively
dispel regulation myths and misconceptions,
using laws and regulations
as a framework for their activities.
Think creatively about regulation,
analyze the elements of successful
implementation, and use it to your
advantage.
Mary Thorson Wright, a former
Federal Reserve manager, is a fi nancial
writer in Virginia.
Profitable - earn an average
net return of 4.8% while building a
relationship with prime customers
Safe - 100% of principal and interest
are insured
Hassle Free - administration and
compliance are managed by RSLFC
Flexible - three ways to participate
2ULJLQDWLQJ /HQGHU -
generate fee income
3DUWLFLSDWLQJ %DQN -
generate interest income
5HIHUUDO 3DUWQHU -
generate referral fee income
___________________
SERVICE PROVIDER®
Preferred
_________________
http://www.qmags.com/clickthrough.asp?url=http://ithandbook.ffiec.gov/it-booklets.aspx&id=20215&adid=P67E1 http://www.qmags.com/clickthrough.asp?url=www.ihelploan.com&id=20215&adid=P67A1
Independent Banker - April 2017

Table of Contents for the Digital Edition of Independent Banker - April 2017
