Risk Disclosure Statement

Document Information

Policy Title: Risk Disclosure Statement. Policy Number: VBS-POL-006. Version: 1.0. Document Classification: Public. Document Status: Active. Effective Date: 01 July 2026. Publication Date: 26 June 2026. Approval Date: 26 June 2026. Next Review Date: 01 July 2027. Approved By: Board of Directors. Policy Owner: Enterprise Risk Management Department.

1. Purpose

This Risk Disclosure Statement explains the principal risks associated with using the products, services, and digital banking platforms offered by SENTINEL PEAK BANK ("the Bank"). While the Bank employs robust risk management practices and industry-standard security controls, no financial service is entirely free from risk. Customers should understand these risks before opening or operating an account or using any banking product or service.

2. Scope

This Statement applies to Personal Banking Customers, Business Banking Customers, Corporate Clients, Internet Banking Users, Mobile Banking Users, Debit and Payment Card Holders, Loan Applicants and Borrowers, Investment and Deposit Customers, and Website Visitors.

3. Our Commitment to Risk Management

SENTINEL PEAK BANK is committed to maintaining a comprehensive Enterprise Risk Management (ERM) framework designed to identify, assess, monitor, manage, and mitigate risks across all areas of the Bank. The Bank continuously reviews its internal controls, governance processes, technology infrastructure, and operational procedures to safeguard customers, employees, shareholders, and stakeholders.

4.1 Operational Risk

Operational risks may arise from human error, internal process failures, technology failures, third-party service disruptions, natural disasters, and business interruptions. The Bank maintains business continuity and disaster recovery plans to minimize operational disruptions.

4.2 Cybersecurity Risk

Despite advanced security measures, customers should recognize that digital banking may be exposed to risks including phishing attacks, malware, identity theft, account takeover attempts, unauthorized access, data breaches, ransomware, and social engineering. Customers should protect login credentials and promptly report suspicious activity.

4.3 Fraud Risk

Fraud may occur through identity fraud, card fraud, online scams, fake investment schemes, email impersonation, telephone scams, and account compromise. The Bank monitors transactions continuously but customers also play an important role in preventing fraud.

4.4 Credit Risk

Borrowers should understand that failure to meet repayment obligations may result in late payment charges, increased interest costs, recovery proceedings, reporting to credit reference agencies, and enforcement of security where applicable. The Bank assesses lending decisions responsibly but repayment remains the customer's obligation.

4.5 Liquidity Risk

Although the Bank manages liquidity prudently, unforeseen economic or market events may temporarily affect the availability or timing of certain financial services.

4.6 Market Risk

Changes in financial markets may affect interest rates, exchange rates, investment returns, treasury products, and deposit yields. Customers should consider market conditions before making financial decisions.

4.7 Foreign Exchange Risk

Transactions involving foreign currencies are subject to exchange rate fluctuations. Currency movements may increase or reduce the value of deposits, transfers, investments, and international payments. Exchange rates may change without prior notice.

4.8 Technology Risk

Digital services rely on technology infrastructure. Temporary interruptions may occur due to scheduled maintenance, network failures, software updates, Internet connectivity, telecommunications issues, and hardware failures. The Bank strives to restore services as quickly as reasonably possible.

4.9 Legal and Regulatory Risk

Banking laws, regulations, sanctions, and compliance requirements may change over time. Such changes may affect product availability, account requirements, documentation, customer obligations, and service features. The Bank will communicate material regulatory changes where appropriate.

5. Customer Responsibilities

Customers are expected to keep passwords confidential, enable multi-factor authentication where available, monitor account activity regularly, notify the Bank immediately of suspicious transactions, maintain updated contact information, protect banking devices, avoid sharing One-Time Passwords (OTPs), and exercise caution when responding to unsolicited communications. Failure to follow recommended security practices may increase exposure to financial loss.

6. Internet Banking Risks

Internet Banking users should understand that risks include unauthorized access, Internet outages, browser vulnerabilities, device compromise, fake websites, and public Wi-Fi exposure. Customers should only access online banking through trusted devices and secure Internet connections.

7. Mobile Banking Risks

Mobile Banking users should keep devices updated, use screen locks, install trusted applications only, avoid rooting or jailbreaking devices, and report lost or stolen devices immediately. The Bank may suspend access if unauthorized use is suspected.

8. Card Risks

Debit and payment cards may be exposed to card theft, card skimming, contactless fraud, counterfeit cards, and lost or stolen cards. Customers should immediately report lost or stolen cards to reduce potential losses.

9. Force Majeure

The Bank shall not be liable for delays or interruptions caused by circumstances beyond its reasonable control, including but not limited to natural disasters, floods, fires, pandemics, civil unrest, government actions, telecommunications failures, power outages, and cyberattacks affecting critical infrastructure.

10. Limitation of Liability

To the extent permitted by applicable law, SENTINEL PEAK BANK shall not be liable for indirect, incidental, consequential, or special damages resulting from customer negligence, unauthorized disclosure of passwords, third-party service failures, Internet disruptions, external cyber incidents, or force majeure events. Nothing in this Statement excludes liability where such exclusion is prohibited by law.

11. Risk Monitoring

The Bank continuously monitors key risk categories through internal audits, compliance reviews, fraud monitoring systems, cybersecurity monitoring, operational risk assessments, and Enterprise Risk Management processes. Risk management is an ongoing process designed to strengthen resilience and protect stakeholders.

12. Changes to This Statement

This Risk Disclosure Statement may be updated periodically to reflect regulatory developments, emerging risks, technological changes, product enhancements, and operational improvements. The latest version will always be available through the Bank's official website.

13. Contact Information

Enterprise Risk Management Department, SENTINEL PEAK BANK. Email: risk@sentinelpeakbank.com. Telephone: +000 000 000 000. Business Hours: Monday - Friday, 8:00 AM - 5:00 PM.

Revision History

Version 1.0. Effective Date: 01 July 2026. Summary of Changes: Initial Release. Approved By: Board of Directors.

Document Control

Policy Number: VBS-POL-006. Version: 1.0. Document Status: Active. Effective Date: 01 July 2026. Last Reviewed: 26 June 2026. Next Scheduled Review: 01 July 2027. Approved By: Board of Directors. Policy Owner: Enterprise Risk Management Department.

Disclaimer

This Risk Disclosure Statement is provided for informational purposes only and does not constitute financial, investment, legal, or tax advice. Customers should seek independent professional advice where appropriate before making financial decisions. Copyright 2026 SENTINEL PEAK BANK. All Rights Reserved.