OCC Issues New Report On Risks, Including Fintechs

WASHINGTON — The Office of the Comptroller of the Currency (OCC) has released a new report updating its views on risk related to credit, operations, compliance, and interest rates, and also addresses risks related to fintechs.


Among the issues covered in the OCC’s Semiannual Risk Perspective for Spring 2019 report are:

  • Credit quality is strong when measured by traditional performance metrics, but successive years of growth, incremental easing in underwriting, risk layering, and building credit concentrations result in accumulated risk in loan portfolios, the OCC said.
  • Operational risk is elevated as banks adapt to a changing and increasingly complex operating environment. “Key drivers for operational risk include persistent cybersecurity threats as well as innovation in financial products and services, and increasing use of third parties to provide and support operations that are not effectively understood, implemented, and controlled,” the OCC report states.
  • Compliance risk related to Bank Secrecy Act/Anti-Money Laundering (BSA/AML) is high as banks remain challenged to effectively manage money laundering risks.
  • Interest rate risk and the related liquidity risk implications pose potential challenges to earnings given the uncertain rate environment, competitive pressures, changes in technology, and untested depositor behavior.

Strategic Risk

The report also highlights financial innovation and related impacts to strategic risk.

The report covers risks facing national banks and federal savings associations based on data as of Dec. 31, 2018, and report presents information in five main areas: the operating environment, bank performance, special topics in emerging risk, trends in key risks, and supervisory actions. It focuses on issues that pose threats to those financial institutions regulated by the OCC and is intended as a resource to the industry, examiners, and the public, the agency said.

The complete report can be found here.

Section: Standard
Word Count: 386
Copyright Holder: CUToday.info
Copyright Year: 2019
Is Based On:
URL: https://www.cutoday.info/Fresh-Today/OCC-Issues-New-Report-On-Risks-Including-Fintechs