Accredited ACH Professional (AAP) Practice Exam

The correct response identifies that both the Originating Depository Financial Institution (ODFI) and the Receiving Depository Financial Institution (RDFI) play crucial roles in managing operational risk within the ACH Network. Operational risk arises from inadequate or failed internal processes, systems, or external events that can impact the smooth functioning of ACH transactions. The ODFI is responsible for initiating ACH entries and ensuring that transactions are valid and comply with NACHA rules before they are sent into the network. Their risk management practices must focus on the accuracy of the data submitted, fraud detection, and the overall health of their connections to the network. On the other hand, the RDFI takes on the responsibility of receiving those entries and ensuring that they are processed correctly. This institution must have controls in place to deal with any issues that arise from incoming transactions, such as ensuring consumer rights are protected, managing returns correctly, and maintaining the integrity of account information. Collaboration between both ODFIs and RDFIs is essential in mitigating risks, ensuring the security of transactions, and safeguarding both financial institutions and their customers from potential operational failures. Each party has its own set of responsibilities and risk management strategies, but together they contribute to the overall stability and reliability of the ACH Network