With the ever-present threat of cyber-attacks taking its toll, information security risk has become more significant that credit risk. This makes it imperative for FIs and NBFIs to not only include information security in their overall asset-liability management programs but to also determine the cyber risk of their vendors. Financial management involves evaluating and mitigating not just information security risk, but also credit risk and compliance risk in order to ensure the safety of a bank’s portfolio.
Policies and Procedures for Risk Management
For a long time, fraud threats have been among the major risks to FIs and NBFIs. Today, banks are protected more than ever before by BSA, KYC and AML policies and procedures in conjunction with vendor management oversight. One of the requirements for institutions is to know their customers. In this regard, banks are required to do the following:
- Vet consumer accounts: Institutions are required to collect and document their customers’ personal information, including name, date of birth, social security number, and address.
- Vet commercial accounts: Besides collecting and documenting personal information of individuals on commercial…
