Building the Future of Online Banking, Now

Join Senior Compliance Advisor, Elizabeth Greene, as she discusses the required steps involved when implementing an online banking program for your institution to ensure proper compliance procedure.

Elizabeth Greene
Elizabeth Greene – Senior Compliance Advisor

After pouring my morning cup of coffee, I signed into my institution’s online banking to peruse my account balance and transaction history. I then proceeded to use the mobile app, transferred money to my sister, scheduled a withdrawal at the local ATM and went about my day, all without walking into or calling an institution. One thing is for certain and becoming increasingly more apparent within the last year and a half, online banking is not the way of the future… it is the present. 

The American Bankers Association completed a study at the end of 2020 that found mobile app usage and online banking have increased while ATM or branch visits have decreased.  While generations vary with their banking preferences, 39% of consumers currently use mobile apps as their primary source of banking and 33% use online banking, which is an increase of 3% and 4% respectively.  

While this number may have risen more quickly due to the pandemic, it does not show signs of slowing down. Perhaps your institution has always wanted to implement online banking, or perhaps the previous year assisted in accelerating this process, regardless, you are now ready to jump in.  So… now what?

First, it is recommended to have a terms and agreement that documents the various features, benefits, transactions allowed, cut-off time, etc. Most institutions typically have a 3rd party processor which facilitates the online banking and provide the institution with these documents. 

Next, it is recommended to ensure management provides a level of oversight to ensure that these products are sufficiently monitored to address heightened inherent risk in online banking, which includes items such as:

  • The Board reviews and approves e-banking technology related products
  • The Board ensures appropriate programs are in place to oversee security, recovery, and 4th party providers (providers of 3rd party vendors)
  • Senior Management evaluates whether technologies and products are in line with the financial institution’s strategic goals and market need
  • E-banking performance is periodically evaluated

Finally, it is recommended to ensure security measures are taken to protect the institution and the consumer:

  • Ensure the administrator has clearly defined responsibilities and controls
  • Ensure a risk assessment is performed to consider all relevant factors associated with the product
  • Ensure there is a layered security approach to internet authentication with multifactor options and enhanced security
  • Obtain policies and procedures as well as determine how online access is granted
  • Ensure the online page is secure.

Don’t forget to involve your IT Department and legal counsel to cover your bases. In addition, I highly recommend the following resources:

Take the guesswork out of compliance and gain unlimited access to experts, guides, and other resources to help you navigate today’s complex regulatory environment. If interested in becoming a Temenos Compliance Services member, contact us today to learn how to begin taking advantage of these perks and more!

Filed under:

Elizabeth Greene
Elizabeth Greene – Senior Compliance Advisor