The better you understand and manage your risks, the better your ability to safeguard your franchise, deploy your funds in the most effective way and capitalise on opportunities more quickly and decisively than your competitors.
The fallout from the credit crisis has introduced volatility and uncertainty in the financial markets and within the wider economic community, the single biggest change that has come to light is that of going from years of abundance to a period whereby both funding and equity are scarce and expensive.
This has placed companies under increased pressure to reduce costs but still continue to grow and maintain a competitive advantage through increased productivity and efficiency. Therefore as the world emerges from recession and the survivors find their new place in the financial order that has transpired, financial organisations are now tasked with transitioning their risk management and governance practices into world class standards.
Our dedicated global network of financial services risk management experts can help you to develop the risk strategy, risk insight and underlying infrastructure of risk identification, evaluation and communication that will give you the edge in a complex and uncertain business environment.
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Regulatory requirements as well as internal drivers are causing financial institutions to reimagine how their finance and risk functions can operate in a more seamless fashion. This applies not only from a data and systems perspective but also from operational and organizational standpoint. Our dedicated risk and finance integration specialists are helping our clients to define visions for integrating key aspects of risk and finance, to develop roadmaps for achieving the vision and to implement solutions.
New regulatory integrated stress testing represents a step-change in complexity and granularity from previous exercises. Banks need to be able to demonstrate the robustness of both quantitative and qualitative aspects of their stress testing. Our tools and methodologies can help our clients to develop comprehensive stress testing capability enhancement programmes that include the latest regulatory expectations and leading industry practices.
The use of models in FS has come under increasing regulatory scrutiny in recent times. Model risk management aims to provide a complete framework within which models and risks associated with models can be effectively managed. Associated with this, independent model review provides a thorough understanding and transparent articulation of modelling assumptions, limitations and approximations. Model review is critical for successful daily model validation, end to end stress testing and all model waiver applications (including CRD4, the fourth Capital Requirements Directive, / IMM, Internal Model Method, / FRTB, Fundamental Review of the Trading Book, etc.). Effective model review and model risk management can therefore provide strong support for the modelling choices made by institutions.
We can support our clients in providing comprehensive and high quality model review and challenge in support of both regulatory and business as usual requirements.
There is increasing focus on the overall risk management framework adopted by financial institutions. Much of this focus is driven by supervisory expectations as well as regulations, but investors and creditors also want comfort that a financial institution has a robust risk management framework. Some financial institutions have also understood that having a robust risk management framework, and communicating this clearly to stakeholders, can be a source of comparative advantage.
Operational risk is perhaps the most significant risk organizations face. Virtually every major loss that has taken place during the past 20 years, including the subprime credit crisis, has been driven by operational failure. Many financial institutions have spent tens of millions of dollars trying to develop a robust framework for measuring and managing operational risk. Yet, in spite of this huge investment, for many firms developing a viable operational risk management (ORM) programme remains an elusive goal.
Our dedicated FS Operational Risk Management team can help our clients to understand the complexities of establishing a robust ORM programme and assist them with ongoing challenges such as developing a practical operational risk appetite for the organization. Our group is focused on addressing key operational risk hot topics facing major financial institutions today including: governance structure, loss data, capital approach, business process mapping and operational risk appetite.
Shadow banking has co-existed with the traditional banking system for a very long period of time. Shadow banks manifest in different forms depending on client needs and prevailing regulatory regimes. Our dedicated financial service professionals can help you navigate through the maze of shadow banking, look for potential opportunities for revenue generation and capital saving as well as business model vulnerabilities and downfalls, and become better prepared for regulatory dialogues.