- A
- B
- C
- D
- E
- F
- G
- I
- L
- M
- N
- O
- P
- R
- S
- T
- U
- V
- X
Account Takeover
Similar to identity theft, this type of fraud happens when an unauthorized individual gain access through online banking applications, capturing the account information to create and write bad checks.
Adverse Action
An adverse action notice is a document sent to a loan applicant stating a bank’s rationale for denying a loan. It may also contain a counteroffer, such as a lesser amount or a request for an approved co-borrower.
Aging Exceptions
The term “aging exceptions” refers to a group of critical exceptions that have not been resolved within a reasonable amount of time.
Altered Checks
Altered check fraud occurs when a fraudster changes the amounts and Payee from a stolen check.
Audit and exam prep is a process that financial institutions go through in order to adequately prepare for upcoming audits and exams.
Authorized Signer Form
An authorized signer form is a document that allows an account holder to grant a range of clearance levels to individuals to perform certain functions within a bank account.
Share via:
Exceptions in Banking
An exception in banking refers to any item that requires attention because it does not meet certain predefined requirements. Many banking exceptions fall into four categories:
- Incomplete information
- Insufficient data
- Expiring documents
- Required actions
Each exception category is discussed in further detail below.
Incomplete Information
During a quality control review, for example, a loan assistant or loan servicing specialist may notice that some items are missing from a file. Exceptions in this situation may include:
- Signatures on documents
- Information on forms
- Documentation that confirms the bank has a lien against certain pieces of real estate, equipment, accounts receivable, etc.
- Customer/member tax returns
Insufficient Data
Another type of exception involves a situation in which an item was completed but not done to the standard necessary. For example, perhaps a full real estate appraisal was needed, but the report falls short. In the case of a commercial piece of property, this may occur when a phase one environmental check was required, but only a quick search was completed.
Expired Documents
Exceptions can also take the form of expired documents. Financial institutions commonly use spreadsheets or desktop tickler files that indicate when information should be updated. Among these types of exceptions are:
- Insurance policies
- UCC documents
- Customer or member financial statements
Required Action
It may be necessary for a bank or credit union to send an employee (or a hired third party) to perform a specific type of action. Common examples include:
- Inspecting building progress on a construction loan
- Counting cattle used as collateral on a commercial loan
- Checking car dealership inventory
- Conducting an annual credit review for a loan
Exceptions and Risk Management
In the financial industry, a small number of exceptions might mean one of two things. Without reliable exception management procedures, low exception numbers could indicate that a bank or credit union is simply missing many items from its files but does not realize it. A robust tracking and management system will lead to fewer exceptions as well—but in this case due to efficiency instead of error.
Banks and credit unions are increasingly relying on core-integrated exception tracking software such as AccuAccount to streamline their processes and enhance overall safety and soundness. Proper exception tracking helps a bank or credit union manage and reduce risk by:
- Quantifying deficiencies in its portfolio
- Tracking the financial well-being of its borrowers
- Checking that collateral is perfected
- Confirming that mortgaged property is insured
Exception Tracking Resources
Looking for more information about exception tracking? Be sure to check out our extensive resource library with free spreadsheets, whitepapers, and eBooks.
Browse our banking definitions page for more terminology.
Explore more resources
Information Life Cycle Management: Meaningful Process Automation
In a world where data reigns supreme, it is imperative that banks and credit unions, regardless of their size, effectively manage information throughout its life cycle. Each stage of this cycle, from inception to disposal, presents distinct challenges and...
Read More »
eBook: NXT Business Digital Banking
Small business (SMB) account holders are turning to desktop banking and mobile applications to manage day-to-day transactions and simple payments. However, many find their digital banking needs unmet. Larger financial institutions often offer products and...
Read More »
Remote Deposit Capture (RDC) eBook
Remote deposit capture (RDC) ranks as a significant feature of modern banking. In fact, a San Global Research industry report projects the RDC market to grow at a compounded rate of 5.8% through 2032. As the banking industry continues its digital...
Read More »
Related articles
Wednesday 29 May 2024
The Importance of Account Holder Education: Best Practices that will Keep Digital Banking Users and Your Institution Safe from Fraudsters
Debbie Eshbaugh,
Senior Product Manager
Financial institutions often hesitate to enforce complex password requirements and regular password changes in their security policies due to concerns about inconvenience, which could lead…
Read the Blog
Tuesday 21 May 2024
Is Inefficient Loan File Management Costing You $100K+ Per Year?
Jenn Mitchell,
Vice President Sales, AccuAccount
Change often comes with a cost. For financial institutions looking to improve their existing loan file management workflows, this cost may involve acquiring software, implementing…
Read the Blog
Monday 13 May 2024
Unraveling the Complexity: How ECM/EIM Solutions Tackle Information Chaos
Cameron Marks,
Director, Product Management
In today's digital age, data is often hailed as the new currency. However, this surge in data production has given rise to a new challenge…
Read the Blog
Thursday 9 May 2024
Beyond the Screen: The Value of In-Branch Banking for Young Consumers
Wendi A. Klein,
Vice President, Marketing & Communications
Is in-branch banking regaining popularity? Bank and credit union leaders should not count the branch out just yet. In fact, some of the largest institutions…
Read the Blog
Tuesday 30 April 2024
Jenn Mitchell,
Vice President Sales, AccuAccount
Banks and credit unions need accurate, reliable, and easy-to-understand exception reports. However, pulling exception data together can involve considerable administrative work for back-office staff. Financial…
Read the Blog
Wednesday 17 April 2024
Why Should Credit Analysts Use AccuAccount?
Cameron Marks,
Director, Product Management
Credit analysts need reliable access to credit documentation in order to do their jobs well, including account holder financial health data. Although it is frequently…
Read the Blog
Tuesday 9 April 2024
Advocating for Streamlined Document Management at Your Financial Institution
Jenn Mitchell,
Vice President Sales, AccuAccount
Implementing a system like AccuAccount can enable numerous efficiencies for commercial lending teams. Expedited access to loan documents, reduced paper, enhanced exception management and reporting…
Read the Blog
Monday 1 April 2024
[Playbook] Loan Management: Efficiently Manage Notices
Jenn Mitchell,
Vice President Sales, AccuAccount
Although notices serve as an essential form of communication with account holders, managing notices can involve considerable administrative work for loan assistants, insurance clerks, and…
Read the Blog