Walk around the credit union and ask who’s responsible for managing risk. You’ll likely get a variety of answers and a lot of finger pointing.
In fact, seasoned risk managers often suggest that they fell into the profession as part of “other duties as assigned.”
“Everybody is responsible, or should be responsible, when it comes to managing risk,” says Bob Bouvier, risk consultant for CUNA Mutual Group. “Risks are constantly evolving and becoming more sophisticated. Every product and service offered to a credit union member brings with it new exposures, which means credit unions should constantly implement, monitor, and revise measures to minimize the potential for loss.”
The good news is that risk management is no longer an accidental profession. Programs and curriculums now exist on how to identify, assess, control, and monitor risks. Plus, credit unions have enhanced their efforts to manage risk within their day-to-day operations.
Many credit unions are moving to enterprise risk management (ERM), a comprehensive process that integrates risk management across the organization to examine risk factors in all processes to shed light on the interrelationships.
Ultimate responsibility for risk management resides with senior leadership. But this obligation resides with management and staff as well.
ERM should be an ongoing practice that you apply throughout the entire credit union.
Establishing expectations through written policies and procedures is typically the best starting point. But even the best policies and procedures are useless if employees don’t follow them, or push them aside to cut corners.
Follow these simple steps to effectively manage risk:
“Making a recommendation on how to authenticate members during remote transactions or suggesting steps related to cash drawer etiquette can go a long way in minimizing fraud,” Bouvier says. “However, never implement new processes without prior approval.”
Report suspected wrongdoing if you uncover a dicey situation. Report it through your credit union’s anonymous hotline or follow the steps outlined in your whistleblower policy.
Always consider the credit union’s reputation within your community. A lack of member confidence can lead to irreparable damage to your role and for your organization.
As they grow, credit unions are moving from a silo mentality to a holistic approach to manage risk. Changing times call for adjustments, and that responsibility lies with all departments and all employees.
Without this mindset, your credit union’s success and ability to help members achieve their financial dreams might be impeded. Take ownership, report suspicious activity, and act as a risk manager to help your members and credit union succeed.
CUNA Mutual Group’s Protection Resource Center allows policyholders to access helpful online resources, including training modules, RISK Alerts, and loss-control recommendations. For more information, contact CUNA Mutual Group.
This article initially appeared in Credit Union Front Line newsletter, the monthly sales and service newsletter for branch staff and their managers. Subscribe now to the print edition or PDF version.