Business & TechnologyBusiness & TechnologyA safety & soundness A safety & soundness

perspectiveperspective

Information Meetings Information Meetings September / October 2004 September / October 2004

Business & TechnologyBusiness & Technology

Technology is a toolTechnology is a tool

Business is the keyBusiness is the key

New communication channelsNew communication channels Use of EmailUse of Email Use of InternetUse of Internet

Money Transmission - EFT, ATM, Bill Pay etcMoney Transmission - EFT, ATM, Bill Pay etc

Reporting – Call reports , Annual Returns etcReporting – Call reports , Annual Returns etc

Credit Union IT SystemsCredit Union IT Systems

Provide:Provide:

Data and transaction processingData and transaction processing

Reports and auditsReports and audits

Business planningBusiness planning

Data storage Data storage

Credit Union IT SystemsCredit Union IT Systems

What about access to data and data What about access to data and data protection?protection?

What about operational procedures?What about operational procedures?

What about controls?What about controls?

What about oversight?What about oversight?

What about responsibility and What about responsibility and accountability?accountability?

Safety & SoundnessSafety & Soundnessin Credit Unionsin Credit Unions Responsibility to serve the membership Responsibility to serve the membership

properlyproperly Must operate within the lawMust operate within the law Protect the business from unnecessary riskProtect the business from unnecessary risk Protect and enhance reputationsProtect and enhance reputations Develop a sound business ethosDevelop a sound business ethos

Safety & SoundnessSafety & Soundnessin Credit Unionsin Credit Unions

Essential to consider in terms ofEssential to consider in terms of

Existing systems & operationsExisting systems & operations

New services offeringNew services offering

Safety & SoundnessSafety & Soundnessin Credit Unionsin Credit UnionsQuestionnaire & ResultsQuestionnaire & Results Password Security - Users are not accountablePassword Security - Users are not accountable

Users share passwordsUsers share passwords Users cannot change their own passwordsUsers cannot change their own passwords

Deletion of DataDeletion of Data Auditing of cancellations, amendments and deletions needs Auditing of cancellations, amendments and deletions needs

improvementimprovement Electronic data recovery should always be possibleElectronic data recovery should always be possible

Electronic reportingElectronic reporting Users unable to extract reports electronicallyUsers unable to extract reports electronically Critical reports cannot be reproducedCritical reports cannot be reproduced

Safety & SoundnessSafety & Soundnessin Credit Unionsin Credit Unions

Questionnaire & ResultsQuestionnaire & Results Dormant and Deceased AccountsDormant and Deceased Accounts

Better management required, system controllingBetter management required, system controlling

Money LaunderingMoney Laundering Report on values exceeding specified limits within a Report on values exceeding specified limits within a

periodperiod

GeneralGeneral Low level of appreciation for system security in Low level of appreciation for system security in

credit unionscredit unions

Safety & Soundness Safety & Soundness in Credit Unionsin Credit Unions

RisksRisks Poor or no clear accountabilityPoor or no clear accountability

System weaknesses or perceptions of System weaknesses or perceptions of weakness can lead to fraud or lossweakness can lead to fraud or loss

Poor procedures and controls in credit Poor procedures and controls in credit unions can lead to fraud or lossunions can lead to fraud or loss

Safety & Soundness Safety & Soundness in Credit Unionsin Credit Unions

Next StepsNext Steps Awareness, appreciation, buy-inAwareness, appreciation, buy-in Set and improve standardsSet and improve standards

• Improve data access security and auditing capabilityImprove data access security and auditing capability• Credit union procedures enforcementCredit union procedures enforcement• Implement best practice in operationsImplement best practice in operations• Board and management oversight is necessaryBoard and management oversight is necessary• Active supervision is essentialActive supervision is essential

Manage the risks betterManage the risks better

Safety & Soundness Safety & Soundness in Credit Unionsin Credit Unions

Feedback & DiscussionFeedback & Discussion