Risks Associated with Money Laundering and Terrorist Financing


Electronic Banking

Objective. Assess the adequacy of the bank’s systems to manage the risks associated with electronic banking (e-banking) customers, including Remote Deposit Capture (RDC) activity, and management’s ability to implement effective monitoring and reporting systems.

1. Review the policies, procedures, and processes related to e-banking, including RDC activity as appropriate. Evaluate the adequacy of the policies, procedures, and processes given the bank’s e-banking activities and the risks they present. Assess whether the controls are adequate to reasonably protect the bank from money laundering and terrorist financing.

2. From a review of MIS and internal risk rating factors, determine whether the bank effectively identifies and monitors higher-risk e-banking activities.

3. Determine whether the bank’s system for monitoring e-banking, including RDC activity as appropriate, for suspicious activities, and for reporting suspicious activities, is adequate given the bank’s size, complexity, location, and types of customer relationships.

4. If appropriate, refer to the core examination procedures, "Office of Foreign Assets Control," page 152, for guidance.

Transaction Testing

5. On the basis of the bank’s risk assessment of its e-banking activities, as well as prior examination and audit reports, select a sample of e-banking accounts. From the sample selected, perform the following procedures:

  • Review account opening documentation, including CIP, ongoing CDD, and transaction history.
  • Compare expected activity with actual activity.
  • Determine whether the activity is consistent with the nature of the customer’s business. Identify any unusual or suspicious activity.

6. On the basis of examination procedures completed, including transaction testing, form a conclusion about the adequacy of policies, procedures, and processes associated with e-banking relationships.


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