RISK MANAGEMENT INSIGHTS
Better risk management for competitive advantage
Recent risk management articles
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Are you good at scoring?Credit scoring is the foundation for evaluating clients who apply for a loan (or other types of exposure for the bank). It is not unusual for it to take up to 12 months to build and deploy a new credit scoring model. Reforming the process will help minimize losses, increase earnings and reduce operational risk.
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Understanding capital requirements in light of Basel IVMany financial firms are already using a popular 2012 PIT-ness methodology for internal ratings-based models. This article examines eight ways the industry is successfully using the methodology – and why this approach can bring synergies for banks, value for regulators, and major competitive advantages.
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Beyond IFRS 17 – what's next?IFRS 17 is not just a new accounting standard. Its fundamental objective is to provide transparency and insight to the insurance business while identifying strengths and areas for improvement. Learn how to keep a long-term vision and achieve broader business value beyond the immediate demands of IFRS 17.
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Understanding capital requirementsCredit risk classification systems have been in use for a long time, and with the advent of Basel II, those systems became the basis for banks’ capital adequacy calculations. What is needed going forward is an efficient and honest dialogue between regulators and investors on capitalization.
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IFRS 17: Waiting is not an optionIFRS 17 is a principles-based accounting standard for the future-oriented valuation of insurance contracts. Designed to increase financial transparency, IFRS 17 requires insurers to report in more detail on how insurance and reinsurance contracts affect their finances and risk.
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Scenario stress testing: Beyond regulatory complianceScenario stress testing offers banks a way to simulate responses to a financial crisis using a wide range of conditions and levels of severity.
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The analytical CRO and the risk aware CFOTo create a more risk-aware organization, the most important collaborative relationship for the CRO is with the CFO and the finance team. The CFO and CRO – as the executives responsible for budgeting and supervision – tend to get caught in the middle of competing objectives.
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General Data Protection Regulation: From burden to opportunityThe General Data Protection Regulation stirs up mixed emotions, but Kalliopi Spyridaki shows how to use the new legislation for business advantage.
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frtb: a wait and see strategy could be riskyFRTB, fundamental review of the trading book, is a regulation that changes how banks analyze market risk in the trading book to address systemic challenges.
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CECL: Are US banks and credit unions ready?CECL, current expected credit loss, is an accounting standard that requires US banking institutions and credit unions to estimate life-of-loan losses at origination or purchase.
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Market Abuse and Advanced AnalyticsHolistic Trader and Trader Surveillance are what the Risk and Compliance departments are crying out for. What’s the role of Predictive Analytics and Machine Learning in Market Abuse Solutions?
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Australian Superannuation at RiskWith over $2tn of assets, Australians’ retirement savings are under attack from Fraudsters and Hackers, even more so as Superannuation providers move into Digital with customer portals and faster processing. However, it is not all doom and gloom as behavioural signals of fraud are typically there well before the actual fraud occurs.
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Bad debt and fraud... It’s all the same, right?In the case of application fraud in banking, or subscription fraud in telecommunications, a large proportion of fraud is typically misclassified as bad debt.
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Who is committing procurement fraud in Australia and New Zealand?The global estimates for procurement fraud and abuse of procurement supply chain are significant – but as it’s usually internal fraud, are we avoiding the problem? The impact of fraud on the business are more than financial – reputation, loss of management time and loss of human capital. Removing the temptation may benefit everyone.
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Three considerations for your next generation tax compliance platformCRS is truly global, extending to any customer who is a tax resident in a reportable country. Don’t view this as just another “tick in the box” exercise. Tackling this with a manual process or even cobbling together a semi-automated system, as many have done for FATCA, just won’t cut it. While it may seem like another situation to throw valuable resources, time and money at meeting a new compliance, I also see this as a real opportunity.
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10 tips for Life Insurance Companies and AMLLife insurance companies have AML challenges that are both simple and complex. The challenges are simple as there are less products and channels available compared to banks. Here are 10 tips to consider to stay ahead of the international crime syndicates.
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IFRS 17 and Solvency II: Insurance regulation meets insurance accounting standardsIFRS and Solvency II encourage comparability and transparency from a regulatory and accounting perspective for insurers, but there are important differences.
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Credit risk management is the answerLending and loan volume is back up to pre-crisis levels. But banks are facing higher delinquencies as well. That's why improving credit risk management is crucial.
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IFRS 9 and CECL: The challenges of loss accounting standardsThe loss accounting standards, CECL and IFRS 9, change how credit losses are recognized and reported by financial institutions. Although there are key differences in the standards for CECL (US) and IFRS 9 (international), both require a more forward-looking approach to credit loss estimation.
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New attitudes for liquidity risk managementRecent liquidity risk shocks and regulatory pressures have highlighted the need for agile liquidity risk management and planning systems. To manage liquidity risk more strategically, banks will need the right strategy, solution architecture and IT systems – plus governance to manage the process.
Risk Management: The Basics
No matter how your organization prioritizes risk, you need proven methodologies and best practices to help you establish a risk-aware culture, optimize capital and liquidity, and meet regulatory demands. High-performance risk analytics can ensure greater efficiency and transparency, and strike the right balance between short- and long-term strategies, so that you can confidently address changing regulatory requirements.
Credit Risk Management
The credit crunch that followed the global financial crisis put credit risk management practices in the spotlight. And they are about to take on an even more prominent role as banks brace for the impact of the new Basel III regulations, which will impose higher capital costs for credit risk.
Even though credit risk management has always been an essential bank function, better credit risk management is essential – and not just for compliance purposes. Learn more about how managing credit risk presents a huge opportunity for improving a bank’s overall performance.
What is liquidity risk?
Once upon a time, liquidity risk management got little more than lip service from banks. But the global financial crisis changed all that by exposing liquidity risk as the industry’s Achilles’ heel. Today, liquidity risk has become a daily part of the banking lexicon, as banks brace for sweeping regulatory changes surrounding liquidity. But is liquidity risk management something to be embraced or feared? Find out what the experts are saying about liquidity risk and the high-performance solutions that can help you manage it.
Learn more about liquidity risk
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