How to Conduct an ACH Risk Assessment and Develop an Effective Risk Management Program

Overview:

As a Financial Institution, a Third-Party Service Provider (TPSP) or a Third-Party Sender (TPS), processing ACH transactions, you can encounter a variety of risks.  Risk DOES exist in the ACH Payment System, as it does in all payment systems.  The risks that need to be examined are Operational, Credit, Compliance, Fraud, Return, and Reputational Risk. 

According to the Nacha Operating Rules, financial institutions are required to assess and manage all ACH risks, which includes developing a Risk Management program. Most ACH risk can be mitigated through proper due diligence for all originating customers and strict adherence to ACH origination and credit policies, which includes monitoring ACH activity.

This webinar will identify the areas of ACH Risk that ODFI's and RDFI's are exposed to when originating, receiving, or processing ACH transactions.  ACH Risk awareness and responsibility still falls on the ODFI even when outsourcing these activities to a third party.  Discussion on ODFI Risk Management Requirements from the Nacha Operating Rules Book (Articles 1 and 2) such as due diligence, exposure limits, auditing, and monitoring (to name a few), plus how the SEC Code being used by the Originator or TPSP or TPS determines specific risk management requirements and warranties.

Included will be the details for the TPS and “nested” TPS conducting their ACH Risk Assessment due to the recent update to the Nacha Operating Rules with “Third-Party Sender (TPS) Roles and Responsibilities”, effective Sept 2022.

Areas covered during the session:

• Discover how the ACH Network functions (overview of ACH, how it works, with SDA (Same Day ACH functionality included))
• Identify the Nacha Operating Rules to utilize when conducting an ACH Risk Assessment
• Developing an effective ACH Risk Management Program using information provided
• Define different types of ACH Risk and mitigation tips
• List what’s needed for a successful ACH Risk Management Program
• Importance of monitoring the entire ACH program on a consistent basis
• Importance of Reporting details surrounding your ACH Program to the Board
• Summarize details of NEW Nacha Operating Rules amendment for ACH Risk Assessments and the TPS (including the “nested” TPS)

Why should you attend?

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. The trainer will outline the key components of an effective ACH Risk management Program.  Other topics include ACH Policies and the importance of them, reporting to the Board regarding your ACH program, and registration requirements with Third-Party Senders (according to Nacha) for the ODFI will be included.  In addition, the details for the NEW Nacha Rule Amendment on “TPS – Roles & Responsibilities” – effective Sept 2022 (which identifies the TPS and nested TPS to conduct a Risk Assessment)

Who will benefit?

• Third-Party Processors
• Originating Companies
• Banking Operations Managers and Staff
• Compliance and Risk Professionals
• Treasury Management Professionals
• Aspiring and Current AAPs (Accredited ACH Professionals)
• Banking Managers/ Supervisors
• Audit and Compliance Personnel / Risk Managers