Consigned Items and Other Customer Services

Transaction Risk

Transaction risk, also known as operational risk, can adversely impact earnings as related to consigned items and other customer services because of the typically heavy volume and record keeping nature of the activity. It is imperative for the bank to have controls and systems in place to ensure the accuracy of records and to guard against fraud. In addition, customer safekeeping and holding items on consignment or for resale requires stringent physical and inventory controls, as well as prudent dollar limits on inventory.

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