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Can integrated risk assessment make life easier for Chief Risk Officers?

Overview

For a financial services chief risk officer (CRO), these are challenging times. Regulators want increased detail around each potential threat. Managing risks and meeting regulatory requirements is difficult—and emerging risks are compounding the challenge. New threats from social media and cyber risk are rising. According to Accenture’s 2015 Risk Management Study, 82 percent of surveyed CROs say emerging risks are requiring more of their time and attention. To top it off, financial organizations are demanding increased operational efficiency from their risk functions, pushing CROs toward shuffling more responsibilities than ever before.

Effectively addressing these challenges may mean taking a new approach. For CROs, the answer might lie in an integrated solution.

DOWNLOAD REPORT: DELIVERING AN INTEGRATED APPROACH TO NON-FINANCIAL RISK ASSESSMENTS [PDF]

…emerging risks, such as cyber and social media, account for more of the CRO’s time than ever before.



Integration barriers

Integration isn’t always a simple thing.

An integrated approach to risk management can significantly help the risk function, and the CRO, move forward. But integration isn’t always a simple thing. We have identified four barriers that can present challenges when building a holistic approach:

  • Methodologies that are not consistent: Different risk assessment processes, being used to evaluate different risks, are employing different methodologies. Making decisions is difficult when the sources and metrics vary.
  • Lack of risk sensitivity: Legacy risk assessment methodologies can be cumbersome, and may not provide the right level of insight.
  • The incredible missing risk: Siloes built up around individual risk management efforts can miss other risks, or leave gaps.
  • Coordination missing: Individual teams may have missed their opportunity to coordinate their efforts with others.

A more integrated approach can alleviate many of these concerns, while also making the risk function—and the CRO—more effective at managing risk. A more integrated approach means marshalling resources to design new approaches in these core areas:

  • Governance
  • Framework
  • Talent and culture
  • Technology and data
  • Management reporting

Integration benefits 

How can CROs gain with a more integrated risk assessment approach? They’ll boost the effectiveness of controls, while also bolstering the lines of defense through improved collaboration.

But a truly integrated approach delivers more. Notably, risk management resources may be used more efficiently, and cost savings can be achieved. Reinvesting that time and money into the overall risk management framework can help an organization better prepare for emerging risks. Better, sharper insights into risk can happen across the risk organization, including insights into how interdependences can complicate or improve a risk scenario. The insights captured can help the business make better decisions across the board, thanks to a more intuitive understanding of its own risk profile.

For more information on building a holistic, integrated approach to risk management, read the full report.

DOWNLOAD REPORT: DELIVERING AN INTEGRATED APPROACH TO NON-FINANCIAL RISK ASSESSMENTS [PDF]