Customer related business process execution failures
Below are the details of the operational risks covered within this selected sub-risk category:
Incorrect processing of customer business transactions, due to business process flaws
Risk Description: -
Business process flaws may result in incorrect processing of customer business transactions. Examples of such incorrect processing include: -
- Incorrect calculation of interest payments on mortgages.
- Incorrect amount transferred from customer's bank account.
- Incorrect calculation of premiums for new insurance policies.
- Incorrect amount of claims processed for insurance customers.
Unplanned disruption to customer related business processes
Risk Description: -
Business process flaws may result in unplanned disruption to customer related business processes. Examples of such disruption include: -
- Non-availability of online banking site.
- Closure of bank branch.
- Non-availability of call center for customers to enquire about purchasing new insurance policies.
- Non-availability of claims processing system.
Improper sharing of customer information, due to business process flaws
Risk Description: -
Business process flaws may result in improper sharing of customer information. Examples of such sharing include: -
- Customer information published on Internet by accident.
- Confidential customer details sent to a vendor by accident.
- Employees without authorised access able to download customer data.
Providing improper advice to customers, due to business process flaws
Risk Description: -
Business process flaws may result in customer advisors providing improper advice to customers. Examples of such improper advice include: -
- Incorrect mortgage advice provided to customers due to incorrect data within IT Systems used by customer advisors.
- Incorrect insurance advice provided to customers due to incorrect information in product documentation.
- Incorrect investment advice provided to customers due to incomplete information on customer's risk profile.
Mis-selling products or services to customers, due to business process flaws
Risk Description: -
Business process flaws may result in sales teams mis-selling products or services to customers. Examples of such mis-selling include: -
- Telephone sales team mis-selling credit card products due to incorrect information provided to them in their sales scripts.
- Insurance sales team mis-selling insurance policies due to incorrect information in product documentation.
- Branch sales team mis-selling mortgage products due to incorrect fees and interest rate information within IT Systems.
Dealing with customers (individuals or firms) covered by international sanctions or embargoes, due to business process flaws
Risk Description: -
Business process flaws may result in sales teams dealing with customers (individuals or firms) covered by international sanctions or embargoes. Examples of such dealing may include: -
- Processing money transfer transaction for a criminal firm.
- Opening account for a known terrorist.
- Selling insurance products to government official covered by international sanctions.
Transactions executed on customer accounts without their permission, due to business process flaws
Risk Description: -
Business process flaws may result in transactions executed on customer accounts without their permission. Examples of such transactions include: -
- Transfer of money from customer accounts.
- Payments processed twice from customer accounts.
- Reduce amount of insurance policy coverage for a customer.
Damage to customer's physical assets, due to business process flaws
Risk Description: -
Business process flaws may result in damage to customer assets. Examples of such damage include: -
- Damage to customer's gold, when transferring from one location to another.
- Damage to customer's art collection, when transferring from one location to another.
- Damage to share certificates, when transferring from one location to another.
Delay in resolving customer complaints, due to business process flaws
Risk Description: -
Business process flaws may result in delay in resolving customer complaints. Examples of such delays include: -
- No response provided to customers even after 30 days of submitting a complaint about aggressive sales staff.
- No response provided to customers even after 30 days of submitting a complaint on improper handling of customer's insurance claim.
Failure to process transactions submitted or approved by customers, due to business process flaws
Risk Description: -
Business process flaws may result in failure to process transactions submitted or approved by customers. Examples of such failure include: -
- Fail to process payments approved by customers.
- Fail to process money transfer approved by customers.
- Fail to process customer request to renew insurance policy on expiry date.
Incorrect fees or charges added to customer accounts, due to business process flaws
Risk Description: -
Business process flaws may result in incorrect fees or charges added to customer accounts. Examples of such addition include: -
- Incorrect fees charged to new mortgage customers.
- Incorrect overdraft charges on customer's current account.
- Incorrect fees charged for renewing insurance policies.
Improper use of customer assets, due to business process flaws
Risk Description: -
Business process flaws may result in improper use of customer assets. Examples of such use include: -
- Utilize customer's asset to fund business operations due to inadequate separation between customer and firm assets.
- Incorrect disbursement of customer's assets due to incorrect information about customer's assets.
Incomplete information sent to customers, due to business process flaws
Risk Description: -
Business process flaws may result in incomplete information sent to customers. Examples of such information include: -
- Partial product information provided to new mortgage customers.
- Partial insurance policy documents provided to new insurance customers.
- Partial monthly statements provided to credit card customers.