Risk and Compliance

Managing risk, ensuring compliance

Hand using a digital tablet to assess risk.

A History of Risk Management

Pathward’s integrity is built on our skill in managing risks and complying with legal and regulatory requirements. We were a pioneer of the prepaid industry and an industry leader in payments, and our experience has led us to develop policies, programs and actions that set us apart from other financial institutions.

Enterprise Risk Management

Our Enterprise Risk Management (ERM) program applies corporate governance to risk-taking activities. The ERM program sets strategy across the enterprise and works closely with the lines of business to ensure that risks are appropriately identified and managed.

Third-Party Risk Management

Just as Pathward’s ERM program oversees our own actions, our Third-Party Risk Management program ensures that our third-party relationships are controlled and mitigated.

Our policy and strategy encourage us to:

Protect our company from avoidable risk and to provide value-added service to business units
Monitor third-party activities
Report risk events and material information to mitigate risk

Business Continuity Management

Business Continuity Management (BCM) sets standards and testing to ensure our company remains resilient in case of disaster. Our standards comply with Federal Financial Institutions Examination Council (FFIEC) and Office of the Comptroller of the Currency (OCC) guidance.

Bank Secrecy Act / Anti-Money Laundering

To safeguard against illicit activity, Pathward’s BSA/AML programs address federal regulations which encompass sanctions, customer identification and due diligence, suspicious activity monitoring, PEP screening, record retention for five years, and annual audits.

Three Lines of Defense

When it comes to managing risk, Pathward has three lines of defense.

First Line of Defense

Managed by frontline business units

Accountable for assessing and managing risks
Responsible for implementing effective internal controls

Second Line of Defense

Managed by our ERM team 

Complements frontline units through its monitoring and reporting responsibilities
Responsible for aggregation of risk enterprise-wide

Third Line of Defense

Managed by our Internal Audit team 

Independent assurance to the Board of the effectiveness of governance, risk management and internal controls