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

Use coupon COMPLIANCE15 to get 15% discount on this virtual seminar

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.

A recent Nacha Operating Rules amendment addresses TPS and “nested” TPS (effective Sept 2022), identifying the existence of TPS (and nested TPS) that requires an ACH Risk Assessment be performed for ALL Third-Party Senders (nested or not). In addition, the Rules amendment includes the ODFI’s obligation with agreements with TPS and their “nested” TPS. Details on the responsibility for the ODFI regarding the TPS registration requirement to include the “nested” TPS and how to get this done to remain compliant with this change.

Why Should You Attend:

This virtual 2-day seminar/workshop 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 with this ACH Risk Assessment seminar/workshop 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.

During this 2-day event, participants will participate in a hands-on activity (using provided worksheets) participating in "assessing the risk" of fictitious companies and third parties to help identify the importance of due diligence (KYC-Know Your Customer), including setting and enforcing exposure limits.

As a financial institution, your ACH Policies on Origination and Receipt of ACH Entries is a big part of helping to manage your ACH Risk. As part of the Nacha Operating Rules, the exposure limits (being set and enforced) should be appropriate based on the risks of each customer (the Originator). By assessing the risk with each Originator and identifying potential companies who may require additional measures to help reduce the risk they bring based on the type of business they are in and/or the type of transactions they are sending.

In addition to the Nacha Operating Rules, Financial Institutions should utilize guidance provided by FinCEN, the FFIEC and the OCC to develop an ACH Risk Management program that reflects the nature and complexity of their activities. This workshop will identify this guidance issued and provide resources for effectively managing ACH Risk in the future.

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 will be covered. The trainer will outline the key components of an effective ACH Risk management Program while participating in a fictitious scenario and developing that program. 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.

This virtual seminar/workshop (via webinar over two days) will be an adventure for all who attend as we assess the risk based on individual companies and the business they are in and then develop an ACH Risk Management Program during a fictitious scenario (this will help outline the key elements of managing ACH Risk).

Register today! A "must-attend" 2-day virtual seminar/workshop!

Learning Objectives:

• 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 (during a fictitious hands-on activity)
• List the different types of ACH Risk and ways to help mitigate
• Define 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

• Direct Access Registration
• TPS (nested or not) Registration
• Contact Information for the ACH Contact Registry

Who will Benefit:

Any payments professional working in the ACH Network will benefit from this course; these individuals could include operations, compliance, AR/AP, payroll, risk management, audit, legal counsel, management, risk officers, and AAP’s.