10 Risk Assessment Tips to Prepare for Your Next Exam
Regional and community-based financial institutions are facing an increasingly complex and demanding world.
The proliferation of third-party software adds complexity to vendor management. Data breaches and outages are increasing scrutiny of cybersecurity practices. Plus, AI and crypto are bringing new regulations to the table.
If you’re feeling scrambled ahead of an upcoming regulatory exam, WolfPAC’s got you covered. Over 6,000 users trust our integrated risk management software to help lighten the load of preparing for examinations.
Plus, our free eBook, “Preparing for FI Regulatory Exams: A Guide for Risk Management Pros,” offers tips and resources for your risk management team. In the eBook, you’ll find advice from two of WolfPAC’s risk management experts:
- Lisa Spampinato, CRVPM, Director of Implementations at WolfPAC; and
- Puja P. Ghiya, MBA, CSM, CSPO, Senior Manager at WolfPAC.
Let’s dive into the topic of risk assessment preparation for regulatory exams and share a checklist that Lisa and Puja put together for risk management teams just like yours.
Preparing for a Regulatory Exam? Download Our Free Guide!
Prep for your next exam: 10 Risk Assessment Tips for FIs
If your next exam is rapidly approaching, you’ll need to cover all of your bases to showcase the strength of your risk management program. Let’s run through the ten items on Lisa and Puja’s checklist:
1. Review past exam results
Start by understanding areas of regulator focus or concern, and ensure that you’ve established controls to address them.
2. Test, test, test!
Take all steps possible internally to ensure that your program is in good shape. Internal audits, risk assessments, and table-top testing are all effective ways to do so.
3. Conduct mandatory employee training sessions
Many examinations require FIs to deliver mandatory training and document related processes. These could include anything from business continuity, phishing, fraud prevention, and other training. Ensure that your employees understand their training requirements and know where to find the resources they need to complete them.
4. Update your policies, procedures, and mandates
Policies, procedures, and regulatory mandates are constantly changing. It’s important to stay on top of the latest and greatest so you know what’s coming in your next exam.
Lisa and Puja recommend proactively engaging with regulatory agencies to ask for advice or clarification. Additionally, WolfPAC’s Regulatory Compliance Risk Management solution automatically generates reports, develops monitoring and audit plans, and tracks federal and state regulatory obligations to help you analyze risks and remediate gaps.
5. Update your risk assessments
Slightly obvious? Perhaps. Essential? Absolutely.
Setting up a schedule to constantly review your risk assessments will help ensure you’re staying up to date. If you’re a WolfPAC user, our solution will automatically display the dates associated with your risk assessments and suggest when they should be updated.
6. Inventory your third-party applications and vendors
Not every third-party vendor requires annual monitoring. However, two types of vendors tend to carry more risk:
- Any vendor that deals with sensitive information (customer data, social security numbers, etc); and
- Software systems that move money (such as wire transfers).
Lisa and Puja encourage FIs to build a list of all vendors in a central location. This will help you identify the moderate and high-risk vendors that deserve more attention from your team. Just by knowing who all of your vendors are, you’re setting yourself up for success.
Regularly update this list and any accompanying onboarding documentation for each vendor.
7. Re-check your cybersecurity controls
Cybersecurity regulations and best practices are constantly evolving to battle new methods from hackers and threat actors. Resources such as the InfoSec handbook can help FIs stay up to date on the latest procedures.
8. Get your report game together
Your team likely has to create different reports for your C-suite, risk committee, auditors, and examiners. You want to bring your “A” game to each of them.
For example: Identify and document which reports are required for each audience and ensure that you have a process in place to generate them that’s effective and not a major drain on resources. If you’re looking to leverage some automation, WolfPAC can run these reports so you can focus on addressing other key areas before your exam.
9. Build plans to address gaps in your program
Very few FIs have a perfect risk management program. A risk assessment might help you uncover a high-risk area in which you’re lacking proper controls. This doesn’t mean your next exam will be a disaster. Regulators simply want to see evidence that you’ve made good-faith efforts to address these gaps with a concrete action plan.
10. Prepare for your next exam with WolfPAC
We hope these risk assessment tips help make your exam prep a breeze!
Additionally, WolfPAC provides a low-friction, easy-adoption risk management platform for financial institutions, healthcare organizations, and FinTech companies.
From generating reports to alerting you of out-of-date assessments, WolfPAC is designed to streamline the exam preparation process. Time-strapped risk management teams can rest assured knowing they’re leveraging the latest and greatest technology to free up their personnel for more strategic work. Head on over to www.wolfpacsolutions.com to learn more about our integrated risk management solution.
And if your next exam is on the horizon, remember to download our free eBook, “Preparing for FI Regulatory Exams: A Guide for Risk Management Pros.”