Wire Transfer Compliance
Customers of a bank may require that payments be made to and from their accounts on an expedited basis via wire transfer. These payments are often for large amounts, and wire transfers are usually initiated and executed very quickly. Errors and the potential for processing unauthorized transactions pose special risks to banks and their customers. In some circumstances, banks can be held liable for a customer’s wire transfer losses even when those losses are the direct result of fraud or negligence by the customer or their agents.
Subpart B of Regulation J and UCC Article 4(A) govern wire transfers. Regulation J specifies the rights, responsibilities and liabilities of banks conducting transfers through Fedwire and imposes a requirement for banks to employ “commercially reasonable security procedures” to reduce the risks of erroneous or unauthorized wire transfers.
To help banks comply with the requirements of Regulation J and UCC Article 4(A), we developed a system of automated forms and a database application.
Our proprietary database application is used by banks to manage wire customer contract information and elected security options (i.e. restrictions, limits, PINs and passwords).
The application is designed to be used with automated wire transfer forms, including a wire transfer agreement and attachments, related resolution and affidavit forms and forms for various types of wire transfer payment orders.
We can help your bank reduce its exposure to wire transfer losses by reviewing the current policies, procedures, internal controls and standard forms used in providing wire transfer services to customers.
We will meet with wire transfer staff and management to discuss vulnerabilities and risk exposure in the existing system and to provide an overview of changes which will reduce identifiable risks.
To mitigate risks in the wire transfer function, we will assist in the development of policies, procedures and controls, including providing revisions or replacements for the forms currently in use, as well as additional forms required to implement additional security procedures and controls.
Assistance with the implementation of new system and training for staff directly involved in processing, reviewing or approving wire transfers is an important part of this project.