The reliance on staff to deal with manual reconciliations and multiple systems is about to reach its tipping point. With headcount reduction and cost cutting, firms are under increasing pressure to automate their reconciliation processes. This combined with key-person risk where recs processes are known to an individual or a small contingent leads to a significant source of operational risk. In the second part of the series from the Aite Group benchmark survey, these challenges are put under th
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The role of the enterprise risk manager has finally become clear: close the gap between strategic level risks and the operational risks faced at the activity level. Despite being a relatively new corporate discipline, expectations for ERM value are already very high. A recent poll shows us why corporations are desperate for ERM managers to be successful.
The poll, conducted by Harris Interactive of 23,000 corporate full-time employees within key industries and in key functional areas1 highlights
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Tuesday, 6th August, 3PM (AEST)
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Please join me as I conduct a Complimentary Webinar on Business Continuity Planning (BCP) and the links between IT and Business Managers.
To present this webinar, I have teamed up with Always Up IT, which is a Microsoft Gold Partner and EMC Premier Partner and assists businesses and government departments with technology needs.
This free webinar will help yo
A study published last week sponsored by Tripwire and conducted by the Ponemon Institute found that while over 80% of security and risk professionals consider their organization's commitment to risk-based security management significant, less than 30% had a formal risk management strategy in place.
Why does such a large gap continue to exist, even as the evidence piles up that organizations with a mature risk framework are better performing and more prepared for an uncertain future?
One hurdle tha
A professional cycling team's captain is not unlike a big bank's risk manager
It’s July, and to many that means just one thing: the100th edition of the Tour De France!
Established in 1903, ostensibly to sell a cycling based sports-paper, L’Auto, the ‘Tour De France’ has become the annual pinnacle in sports endurance, teamwork and strategic planning. At its inception, teams were actively discouraged as originally tour organizers fought to maintainits status as the ultimate test of each individual
Today’s banking industry must deal with an evolving regulatory landscape by developing new and innovative strategies for acquiring and optimizing capital. Banks must find a new way to raise capital, maintain a functional capital structure, and continue providing the products and services their customers demand while staying profitable. The new deadline for implementing the Basel III capital requirements makes capital management the most important issue for banks today.
Bogie Ozdemir, Vice Preside
LONDON – Britain legalised gay marriage on Wednesday after Queen Elizabeth II gave her royal assent to a bill approved by lawmakers, the culture ministry said.
Same-sex couples will be able to marry from next year after Prime Minister David Cameron pushed the legislation through against the will of dozens of his own Conservative lawmakers.
Members of parliament cheered as they were told the historic bill, pushed through by Prime Minister David Cameron despite opposition within his own party, had p
Ishikawa Diagrams are often used to investigate how different risk factors can combine together to cause a specific outcome and are common techniques for quality control or defect inquires. The diagrams are quite popular because they are easy to understand and they can also be appraised by technical or non-technical managers alike.
Ishikawa Diagrams explained and demonstrated using R-Project in a couple of minutes.
More can be found here [ LINK ]
Risk Leadership: Qualified Risk Director - What Does It Take?
The Qualified Risk Directors Governance Council of the Directors and Chief Risk Officers Group (“the DCRO”) based in the US with members from “over 100 countries” has recently published Qualified Risk Director Guidelines. The guidelines outline the skills and experience Boards and shareholder groups should be looking for when appointing Board members to boost oversight of Risk Management.
The guidelines state that Risk Directors shoul
Fifteen of the world’s top risk managers met recently at the 2013 RIMS Risk Summit. When the topic of reputational risk arose, the group struggled to develop a concrete value proposition, but unanimously agreed that no ERM assessment that failed to tackle reputation risk would be deemed complete by leadership.
Their recognition calls attention to one of the biggest hurdles confronted by risk managers in all industries when faced with high level risks deemed critical by the board or executive lead
A recent survey carried out by KPMG and the Economist Intelligence Unit finds that 81% of risk managers and executives fail to effectively capture risk appetite in their business models, what can we do?
In this blog posting I have linked to the new KPMG Expectations of Risk Management survey and included an infographic for fixing risk appetite.
More can be found here [ LINK ]
The Biggest Risks in an Internal Audit May Be the Issues You Miss Richard Chambers, CIA, CGAP, CCSA, CRMA, shares his personal reflections and insights on the internal audit profession. For many years, I taught accounting courses during the evenings at a local university.
I would often tell my students, “The only stupid question is the one that is never asked — unless the question is, 'Would you postpone the next exam?'” My years as a college instructor coincided with the early years of my inte
An interesting question was sent to me only the other day on Supply Chain Risk Management.
"Martin, do you have any specific risk frameworks or do you know of any good case studies that have been published on Supply Chain Risk Management (SCRM)?".
Supply Chain Risk Management is a complex and intertwined risk initiative to kick off and we have included a schematic which outlines some of the requirements that may need to be covered. We have also linked to an absolutely fantastic white paper that is
We recently worked with Aite Group on a benchmark survey exploring the reconciliation challenges facing financial services firms. The benchmark threw up a number of interesting findings around issues such as an over-reliance on manual processes, delays in onboarding and issues in handling non-standard and inter-system recs. In this first of a series of blogs on the benchmark findings, I will examine how a ‘one-size-fits-all’ approach no longer fits the bill.
Many banks are trying to use yesterday
It is interesting to note that in his Jan 31st speech (see page 6-8) Gabriel Bernardino, Chairman of EIOPA, reiterated EIOPA’s intention to issue guidelines to national supervisors to ensure that from 2014 the supervisors and insurance entities are prepared for the Solvency II regime in a consistent way.
The focus/priority of EIOPA now appears to be the aspects of the Solvency II regime that are management related, rather than Pillar 1 calculation related. The ‘certain important aspects’ covered
Operational risk management has moved beyond the simple calculation of capital requirements. Today operational risk managers need to have a proactive, holistic approach to operational risk to ensure they maintain their organizations’ profitability and reputation. Recent financial scandals have shown that operational risk could bring tremendous losses and not every firm is capable of recovering from them.
Paul Emerson answered a series of questions written by GFMI before the forthcoming Proactive
The Australian housing bubble is looking to be a bigger problem for that country than the U.S.' was in 2008-09. Australia differs from the U.S. both in terms of relative economic conditions and the health of its property markets. The mountain of debt is Australia is mostly private - housing - and dwarfs public-sector debt.
Australians have gone heavily into debt to buy houses that cost more than ever, especially the land component; and there's no sign this trend will end anytime soon. Mortgage de
The U.S. dollar is losing its status as the world's reserve currency. It's not happening all at once, but slowly and methodically as the dollar is used to settle international trade less and less. The Federal Reserve continues to rig the markets to foster weakness in gold (GLD) prices through a combination of continued ETF outflows and upheaval in the foreign exchange markets created by the debasement of the Japanese Yen (FXY) to support the notion of a strong dollar. This has sparked tremendous
A number of past financial crises have had their roots in countries pegging their currency to the U.S. dollar. The Thai baht was at the epicenter of the Asian Crisis of 1997/98. Argentina's hyperinflation of 2001/2 was also caused by a disastrous currency peg. Today there is not much left of that policy, but there are two notable exceptions and they are two of the most important currencies in Southeast Asia, the Singapore dollar (FXSG) and the Hong Kong dollar.
While their pegs are different in n