Pub. 3 2013-2014 Issue 5

16 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S FEATURE ARTICLE DAVID R. PAYNE, ESQ. CHIEF OPERATIONS OFFICER BANK FINANCIAL SERVICES GROUP “In addition, dashboards provide at-a-glance views of an institution’s daily and monthly activities through trending reports and charts—and can even provide “what if” illustrations. For example, a bank could determine how its bottom line would be affected if 10 percent of its loans defaulted.” This article will highlight some of the steps and procedures that a bank should consider both froma regulatory compliance standpoint, and also from a practical risk management perspective. A third-party relationship is simply any contractual service or product that the bank utilizes or sells through the bank. Regard- less of the size of the bank, there will always be certain services and functions that are outsourced and the risk management pro- cess should cover each of those third-party entities. Your bank should pay particular attention to any third-party relationship that provides a “critical activity” in relation- ship to the bank. For example: you need to pay more attention and do enhanced risk management for a third-party relationship that provides your core processing than one who provides branch pamphlets! Attention Bankers: Have you Properly Assessed your Third-Party Vendors? O n October 30, 2014, the Office of the Comptroller of the Currency (the “OCC”) issued OCC 2013-29 regarding the steps that national banks and federal savings associations (“FSA”) should implement to effectively monitor the risks involved with third-party relationships.