A proactive approach to risk management involves continuous monitoring and adjustment. The Office of the Comptroller of the Currency (OCC) has said examiners will focus this year on identifying and assessing risk management related to products and services (including those with third parties and especially those involving complex technologies like artificial intelligence) to safeguard against operational, compliance, reputation and financial risks. Regularly update risk assessments based on emerging threats and changes in the financial landscape. In addition, strong internal controls are critical to ensuring that fraud mitigation and detection procedures are followed in practice. Quality control processes and internal audits ensure that all steps are followed to avoid those unexpected losses. In a recent statement to the American Bankers Association, Acting Comptroller of the Currency Michael Hsu pointed out that “the responsible approach to innovation is … by progressing in tightly controlled stages where the risks can be identified, measured and managed at each stage. This takes discipline and time. In short, responsible innovation plays the long game.” Integrate Case Management Systems Efficient fraud case management is essential for investigating and resolving incidents. Integrate case management systems that streamline the process of tracking, analyzing, responding to and reporting fraud cases. A well-organized case management system facilitates collaboration among different departments, leading to quicker and more effective resolution. Educate Staff and Clients Human error remains a significant factor in fraud incidents, so it is imperative to stay current on trending fraud scams, particularly those that exploit the elderly, the lonely or the less-than-tech-savvy. Educate both staff and clients about fraud typologies and potential fraud risks. Provide training on recognizing phishing attempts, social engineering schemes, secure password practices and, for staff, the importance of reporting suspicious activities promptly. An informed and vigilant community is a powerful deterrent against fraud. Stepping Up Your Fraud Mitigation Efforts As financial institutions embark on introducing new products, prioritizing fraud mitigation is paramount. By instilling open communication methods and following these steps, financial institutions can fortify their defenses against fraud and protect clients and their bottom line. As illicit actors evolve with more innovative, complex schemes, financial institutions must be one step ahead. It’s never too late to beef up your fraud detection and prevention program and avoid those hard dollar losses. Terri Luttrell is a seasoned AML professional, former director and AML/OFAC officer with over 20 years in the banking industry. She has successfully worked with institutions to develop AML/OFAC programs, optimizing various automated solutions and streamlining processes while ensuring all regulatory requirements are met. As the compliance and engagement director at Abrigo, Terri provides insights that contribute and support long-term banking strategies based on analysis of market and industry trends, competitor developments, and financial and regulatory technology changes. She is an audit-certified anti-money laundering specialist and certified financial crimes specialist. As financial institutions embark on introducing new products, prioritizing fraud mitigation is paramount. WE MAKE IT EASY LET OUR TEAM HELP YOU SECURE THE DEAL AND LOWER YOUR RISK • UP TO 90% OVERALL FINANCING • UP TO 25 YEAR TERM • FIXED-RATE PREFERREDLENDINGPARTNERS.COM | 303.861.4100 Leveraged financing and refinancing of owner occupied real estate and long-term equipment. Most for-profit small businesses eligible. SBA defines businesses with net profit after tax <$5.0 Million and tangible net worth <$15.0 Million as small. 7 Colorado Banker
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