Risk Management Flashcards
(22 cards)
Risk of financial loss resulting from the failure of internal processes and systems because of human error or external events
Operational
Risk from reliance on outside parties to perform services or activities
Third-Party
Risk of theft from deposit accounts by way of multiple points of access
Cross-channel
Risk when a party to the transaction fails to comply, either knowingly or inadvertently, with payment system rules and policies, regulations, and applicable U.S. and state laws
Legal/compliance
Risk that a payment transaction will be initiatied or altered in attempt to misdirect or misappropriate funds
Fraud
Risk that a party will not settle their obligation for full value when due
Liquidity
Risk caused by new and emerging network communication technologies
Technology
Risk that a party to the transaction will not be able to provide necessary funds, as contracted, for settlement to take place
Credit
Type of control that includes policies and procedures that are established to reduce risk and ensure operating, reporting, and compliance objectives are met
Internal controls
Finding, recognizing, and describing risk
Risk identification
Type of control that increases the reliability of financial records
Internal accounting controls
Type of internal control that is assigned to prevent an individual from both initiatiing and concealing errors, either intentionally, or accidentally
Segregation of duties
The means of confirming a person’s identity
Authentication
Using one or more factors to authenticate an identity before initiation
Another term for multi-factor authentication
Strong Customer Authentication (SCA)
What three factors make up Strong Customer Authentication (SCA)?
1. Something you have
2. Something you are
3. Something you know
- Possession
- Inherence
- Knowledge
Type of authentication that uses physical features unique to an individual
Biometric
Method of authentication that links a user’s identity to the possession of a specific device, such as a smartphone or laptop, from which authorized payments can be made
Device binding
Method in which the risk associated with a transaction is assessed, determining the level of security necessary for fulfillment
Risk-based authentication (RBA)
Process to comprehend the nature/level of risks
Risk analysis
Process implemented to control identified risks
Risk controls
Process of comparing risk analysis results to determine if controls are effective and residual risk is acceptable
Risk evaluation
Type of authentication that requires a transaction initiated via one delivery channel to be reauthenticated or verified via an independent delivery channel to complete the transaction
Out-of-band
