Key risks for federal banking systems
AML AND COMPLIANCE NEWS |
On Jan. 18, 2018, the OCC released the Semiannual Risk Perspective for Fall 2017 report to the public. The report addresses key concerns identified by the OCC for federal banking systems, such as national banks and federal savings associations. The report, which is published twice a year, provides data obtained on the operating environment, bank performance, trends in key risk areas, and the public. The results stated within the report are based on data obtained as of June 30, 2017. In the report, the OCC has identified the following areas as key concerns for federal banking systems:
- The credit environment due to the continuing “aggressive competition, tighter spreads, and slowing loan growth” which leads to “heightened risk if the economy weakens or markets tighten” rapidly
- Operational risks due to the increase of third-party relationships and cybersecurity threats
- Compliance risks due to continuing money-laundering risks as well as consumer compliance risks
While the report focuses on concerns for financial institutions regulated by the OCC, this report can be used as a resource for the financial industry, including financial institutions and examiners. Therefore, financial institutions may use this report as a resource to understand the key concerns in the industry and develop internal controls to mitigate risks, as needed, for the institution.