How to Conduct an ACH Risk Assessment and Develop an Effective ACH Risk Management Program
Owner, Dynamic Mastership, LLC
Owner, Dynamic Mastership, LLC
There is risk in every type of payment system and the ACH network is no exception. As a Financial Institution, Third Party Service Provider or a Third-Party Sender, processing ACH transactions, you can encounter a variety of risks such as credit, fraud and operational (to name a few). According to the NACHA Operating Rules, financial institutions are required to assess and manage all ACH risks, particularly when the institutions engage in riskier ACH activities. The risk of fraud can be mitigated through proper due diligence for all originating customers and strict adherence to ACH and credit policies.
This virtual 2-day workshop will include a hands-on activity (using provided worksheets) where participants can participate in "assessing the risk" of fictitious companies and third parties to help identify the importance of due diligence (KYC-Know Your Customer) and setting exposure limits. In addition, adhering to the financial institutions ACH Policies on Origination and Receipt of ACH Entries is a big part of managing ACH risk. Exposure limits should be appropriate based on the risks of each customer (Originator) and identifying potential companies who may require the use of pre-funding arrangements or reserves (which can both be effective in helping to control losses).
ODFI's and RDFI's are exposed to a variety of risks when originating, receiving, or processing ACH transactions, or outsourcing these activities to a third party. Financial Institutions should use guidance provided by FinCEN, the FFIEC and the OCC (in addition to the Rules developed by NACHA) to develop an ACH Risk Management program that reflects the nature and complexity of their activities. This workshop will identify the guidance provided and provide resources for effectively managing ACH Risk in the future. In this session, we will outline the key components of an effective ACH risk management program while participating in developing that program in a fictitious scenario.
This virtual workshop will provide the details on the NACHA Operating Rules for conducting an ACH Risk Assessment and developing an effective Risk Management Program for the participants in the Network who are required to perform this task. In addition, details on guidance from FinCEN, the FFIEC and the OCC will be discussed. ACH Policies and the importance of them, reporting to the Board regarding your ACH program, and registration requirements (according to NACHA) for the ODFI will be included.
This virtual workshop (via webinar over two days) will be an adventure for all who attend as we develop an ACH Risk Management Program during a fictitious scenario, while learning the key elements of managing ACH risk. This is definitely a "must-attend" 2-day virtual workshop webinar series!
Any payments professional working in the ACH Network will benefit from this course; these individuals could include operations, compliance, AR/AP, payroll, risk management, audit, legal counsel, management, risk officers, and AAP’s.
Overview on “How the ACH Network functions” and outline the NACHA Operating Rules on conducting an ACH Risk Assessment and developing an effective ACH Risk Management Program.
Define the different types of Risk and ways to mitigate. ACH Risk affects the ODFI and RDFI, Third-Party Service Providers and Third-Party Senders. Leads into a “hands-on” process of doing a Step-by-Step process of Assessing ACH Risk with Originating Companies and/or Third-Party Senders (TPS) using fictitious companies and one TPS to enhance the learning (includes the process of due diligence and setting exposure limits) from the ODFI perspective. Assessing the ACH Risk on the receive side of ACH transactions and the processing of those transactions will be part of this “hands-on” activity.
Continuation of ACH Risk Assessment “hands-on” Activity. Around 2:30, move into the development of a Risk Management Program by introducing the key components within such a program, outlining details from guidance issued by FinCEN, FFIEC and the OCC.
Continuation of discussion on what’s needed for a successful ACH Risk Management Program, outlining guidance from FinCEN, the FFIEC and the OCC (plus NACHA). Resources for workshop participants will be shared to aid in future ACH Risk Management programs.
Recap from previous day (outlining all discussions and progress during hands-on activity). Continuing on with hands-on activity to include the development of an ACH Risk Management program for a “fictitious scenario” utilizing the companies/TPS from previous day for the ODFI program, including the RDFI perspective when receiving and processing ACH transactions.
Continuation and completion of an effective ACH Risk Management Program, completing checklists to ensure all key components are included. Discussion on the importance of monitoring the entire ACH program on a consistent basis, reporting details relating to the ACH Program to the Board, and registration requirements with NACHA.
Donna founded Dynamic Mastership, LLC in December 2014 in an effort to utilize her 24+ years’ experience in the financial services industry, by sharing her passion for training financial institutions and organizations on the Rules and processes for electronic payments (with her specialty being ACH payments). She holds the Accredited ACH Professional (AAP) designation (achieved in 2004). Donna’s experience before founding Dynamic Mastership, includes 9 years' serving as the Education Service Director at a Regional Payments Association (RPA), where she managed and facilitated the entire Education program for nearly 800 financial institution members. Prior to that, Donna spent 14 years with the Federal Reserve Bank of Minneapolis in various departments, where she started her training career as the Training and Development Specialist in 2003.
Donna is a certified Master Trainer who continually uses her extensive knowledge, experience, enthusiasm and passion for transferring payment processing details, while using the adult learning theory is remarkable! Her training style has helped many payment professionals remain consistently informed of the NEW and ever-changing NACHA Operating Rules and explaining how the Rules apply when performing daily operational tasks including complex return and exception processing. She incorporates scenarios and examples in her detailed training, so the Rules are easy to comprehend and apply to real-life day-to-day ACH processing. Donna's ability to engage the learner through the entire training event helps the adult learner apply what they've learned during and after each training session.
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