Financial Crime Compliance inherent risk assessment methodology and tool for a Canadian National Credit Union

Client Situation:

• A small provincial credit union was applying for a federal banking license in order to expand nationally as part of its strategic plan. As a result, they were building compliance and regulatory capabilities to meet federal standards and requirements.

• As part of the application review, the credit union was required by OSFI to enhance a number of compliance program elements, including the enterprise FCC/ATF Inherent Risk Assessment methodology, in order to obtain the national license.

• ComplyGenics was engaged to enhance their existing FCC/ATF Risk Assessment methodology as well as to build an assessment tool in order to meet the heightened OSFI requirement.

Our Approach:

ComplyGenics designed and delivered an industry-standard methodology and tool based upon:

• Leading industry examples of FCC/ATF Risk Assessment methodologies and tools;

• Discussions with the credit union FCC/ATF Director and staff in terms of specific needs unique to the credit union;

• Alignment to the credit union’s broader operational risk framework which had also been recently updated; and

• Other relevant regulatory trends in Canada and the US.

The methodology and tool were reviewed with the client's FCC/ATF Director and team and delivered in the draft as a baseline for further revision by the client. Execution of the initial risk assessment process and related calibration of the methodology and tool was not in scope for the engagement.

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Result:

The client gained an industry sound example of an enterprise FCC/ATF risk assessment methodology and tool. The deliverables brought together a number of perspectives from industry comparable organizations and served as a sound starting point for the execution and calibration of the credit union’s annual risk assessment.