Have you noticed that something is a little off with your team? Pinpoint the top areas that could be affecting efficiency at your bank or credit union with our latest series: 6 signs your team is stretched too thin and how you can fix it. Over the past few weeks, we’ve been identifying the top areas where you can improve your financial institution’s processes. We’ve addressed an under-qualified team of reviewers, inconsistent turn times, not staying to date with the latest regulations, and more. But what if you know you need to update your internal control procedures but don’t know where to start. That’s why we are here to help. Today we’ll deep dive into when and how to update your internal control procedures to help your team be even more effective.
The OCC defines internal controls as “the systems, policies, procedures, and processes affected by the board of directors, management, and other personnel to safeguard bank assets, limit or control risks, and achieve a bank’s objectives.” When enforced correctly, they can dictate whether banks are running as smoothly and effectively as possible. Control systems help a bank’s senior managers and board of directors ensure that financial reporting is reliable, risk management systems are efficient, and bank operations are in compliance with regulations.
Internal control procedures and policies differ by the bank
The complexity of your internal control system depends largely on your bank’s size and structure. National banks must follow formal regulations that dictate managerial and operational standards, and those with more than $500 million in assets must submit annual reports to the OCC and FDIC. Community banks, on the other hand, tend to have a less formal, less structured control system.
No matter the size, financial institutions that enforce their internal control systems will increase financial reporting accuracy and decrease the number of mistakes caused by human error.
It’s not about when it’s about how
The best way to determine when to update your internal policies isn’t on a strictly month by month basis; rather, you should simply update whenever regulations change. If you’re asking how often to update your financial institution’s internal policies, you’re asking the wrong question. You should update whenever USPAP and banking regulations change, which means you should have a process for finding out when those updates occur.
Does your bank have a process for monitoring regulation changes? If you’re unsure, then you probably don’t have a process in place. Having the proper processes intact limits the chance that your banking staff is unpleasantly surprised by unknown regulations. To stay up to date with the latest regulations, follow the FDIC, OCC, and RMA websites.
Want full access to all six signs that your team might be stretched too thin? Download the full ebook today and start streamlining your processes to be even more effective. Still have questions? Feel free to reach out at any point. We are here to help.