Reinvent your approach to operational risk management and enhance your business growth

Financial Services businesses rise, fall or run on the spot by their ability to price and manage risk, Unlike almost any other sector, their business is risky. Manage that risk well, and they take their opportunities and grow in a confidential and responsible manner. Do a bad job and they boom and bust, stagnate, or cause more pronounced shocks to the real economy.

But now, just as firms need risk management to deliver, they find it battered, bruised and defensive. Risk management needs to change. But for that to happen, the risk managers need to come out from their silos and reinvent themselves as partners of the rest of the business.

“As the Financial Crisis reminded us with a ferocious intensity, the shocks to the financial system from market and credit risk can be very severe. However, as we are now learning the shock from the operational side can be just as significant.”

Lyndon Nelson- Deputy CEO & Executive Director- Bank of England

Along with substantial change and an increasing reliance and dependence on technology, we have seen an increase in the number of operational incidents; be they caused by internal failures or from external attack. Therefore, it is more important than ever for regulators to set out clear expectations of firms in respect of their operational resilience.

The current business context presents risk management with a unique set of demands. Slower economic growth and declining profits has made increasing the efficiency and reducing the cost of risk management vital. Due to the increased regulatory requirements, the implications of an institution’s business strategy on capital adequacy and liquidity demand greater attention.

In this new era, companies will need to decide whether they will continue with their traditional methods or instead rethink their approach to risk management. To keep up with the rapid pace of regulatory change since the financial crisis, institutions have often implemented many systems to address specific regulations, rather than taking a holistic view of the risks and regulatory requirements facing the organization.

This has resulted in a disjointed structure with activities conducted in silos, making it difficult to gain a clear view across the entire risk management value chain. At some institutions, business units have not taken full ownership for managing risks in their area, and the responsibilities between the business and risk management are not defined clearly.

Competing in the new environment requires financial institutions to rethink how they manage risk. Institutions will need to ensure risk management is an active participant in setting strategy, that there is an effective program to create a risk-aware culture and manage risk conduct, and that risk management responsibilities are clearly defined across all three lines of defense. In addition, they need to leverage the new technologies available to substantially reduce costs by automating repetitive manual activities, while simultaneously improving monitoring and response.

PwC’s Academy will be launching two Operational Risk programmes targeting Financial Institutions which will be conducted by Operational Risk expert, Dr. Ariane Chapelle who has over 20 years of experience in Risk Management.
 

  1. Identifying Preventative Key Risk Indicators for Financial Services- 08 & 09 October
  2. ICAAP and Basel III for Operational Risk- 10 & 11 October

The workshop on Identifying Preventative Key Risk Indicators focuses on designing preventative KRIs and providing organizations a renewed look at their reporting practice on performance and controls. This two day training programme will take you through a combination of presentations and practical exercises and offer a full review of the role and attributes of KRIs in financial services. It will also clarify some confusing ideas about KRIs and offers insight on their role in a risk management framework.

Participants will be exposed to many examples of the best performing KRIs in banking and financial markets and they will participate in exercises that will teach them a step by step methodology to select and design preventive KRIs.

Programme Coverage

  • Receive a comprehensive overview of indicators
  • Understand step by step how to select preventive KRIs
  • Discuss process mapping and control design
  • Apply KRI set to specific risks such as information security and project management
  • Review indicators for risk culture and conduct
  • Use KRIs as performance management tools

 

The workshop on ICAAP and Basel III for Operational Risk provides a synthesis of different types of risk management and regulatory context covered by Basel III to build a bank ICAAP (Internal capital adequacy assessment process). Particular focus on the SMA capital revision for operational risks and scenario assessment and quantification for capital purposes will be discussed during the workshop.

This highly interactive two days of learning will allow participants to directly apply the methods proposed to their own organisation, for concrete take-away of the course.

Programme Coverage

  • ICAAP context and SMA reform
  • Class workshop: ICAAP practice and challenges
  • Scenario assessment: preparing for the unexpected
  • Class workshop: identifying & structuring scenarios
  • ICAAP content and quality criteria
  • Class workshop: ICAAP: business model and risk profile
  • Resilience and incident management
  • Class workshop - War Games: simulating response to external scenario

 

Course Director- Dr. Ariane Chapelle

Ariane Chapelle has a PhD in Economics and is active in operational risk management since 2000, with experience as head of operational risk management at ING Group and Lloyds Banking Group. Ariane Chapelle runs since 2006 her own training and consulting practice in risk management. Her clients include Tier 1 financial organisations such as AVIVA, AXA, HSBC, JP MORGAN and SWIFT. Before running her practice, Dr. Chapelle was the holder to Chair of International Finance (2003-2007) of Solvay Business School (University of Brussels). 

Dr. Chapelle is Honorary Reader at the University College London in Operational Risk Measurement since 2013, Fellow of the Institute of Operational Risk and member of the editorial board of the Journal of Operational Risk. She is an acclaimed trainer worldwide in operational risk and designs classroom training programmes and course series on ORM certificate for many large organisations, both in-house and in public courses. Her book « Reflexions on Risk Management », published in July 2017 by Risk Books is the collection of her 28 articles written on operational risk management.

Attend our workshops and build a resilient approach to Operational Risk Management. Contact us on academy.srilanka@lk.pwc.com/ 0770552524 for registration and more information.

You can also click here to access the detailed course brochure.

Subject area: Risk Management