Risk Management for Financial Compliance: Evaluation of the Risks versus Rewards

Risk Management for Financial Compliance
Student’s Name
Institutional Affiliation
Risk Management for Financial Compliance
XYZ-ABC Bank Case
Delegation of services from a banking institution to a retail shop should not be adopted bearing multiple risks. Such a move is risky because it hinders adherence to rules and regulations and it can also harm the business model.
Evaluation of the Risks versus Rewards
There are notable risks linked with the delegation of services from a banking institution and a retail outlet. Remarkably, the two entities are distinct and operate in different operational settings. As such, the organization would default the Board of Governors of the Federal Reserve System supervision of the bank (Ramakrishna, 2015). The board anchors its supervision on the supervision group takes a risk-focused approach based on a supervisory plan that is customized to a firm’s organizational structure and its risk profile. With such an alliance in place, the bank will restructure its risk profile and transfer the delegated services permissible non-banking activities. Even under that category, the bank will still embed its operations on only lines of financial businesses that can be conducted by bank holding companies. Customer deposits are not included among the lines of financial businesses (Ramakrishna, 2015). The bank should, in that case, reengineer the retail outlet to reflect its operational portfolios to match the regulatory demands. The only reward that could come from such a change at this initial stage is operational convenience. Customers may have easy access to banking services without visiting the banks necessarily. Even so, questions must be asked on whether customers will easily accept third-party transactions with limited image lift.
Communication to the Line of Business
The communication approach should be rooted in legal and operational efficiency concerns. The stakeholders must understand that such a business move bears notable violations of the Board of Governors of the Federal Reserve System supervision criteria (Chapelle, 2019). It is also worth remarking that such a move will likely taint efficiency in banking activities. Ultimately, both companies stand the risk of confusing their customers on their exact product/service portfolios.
The Compliance Risk Profile of Potomac
Implementation of risk management in healthcare has traditionally been based on patient safety. Exploring aspects of safety concerns including patient injuries, errors, and hospital-based infections should be primary in developing a compliance risk profile. A short-term compliance risk profile will be based on the content and outcome of the legal duel between CVS and HIPAA (Chapelle, 2019). The case was argued based on violations of the Federal Trade Commission (FTC) Act. The ruling found CVS failed in policy implementatio...