Risk management

IndustriesFinancial ServicesBanking & Capital Markets

Risk management

International and UK regulators have increased their focus on risk management and risk culture since the financial crisis revealed their failings as one of the root causes. This introduces wide-ranging opportunities as well as complex, interrelated risks. In light of this, it is now more important than ever for organisations of all sizes to obtain the best possible advice and benefit from robust risk management.

The risks that firms face are meaningful, complex, and highly integrated. To be both agile and resilient, businesses must have a clear understanding of their risk profiles and how to manage them. An effective enterprise risk management framework enables the assessment, prioritisation, and management of risk in a holistic way, at an enterprise level. It should also provide critical insights that help drive decision-making and grow the business, taking advantage of the opportunities that arise as well as managing the downside of risk.

Firms must already contend with a challenging economic environment driven by high inflation and interest rates, cost of living increases, geopolitical tensions, supply chain challenges, and a climate crisis. The collapse of Silicon Valley Bank and the buyout of Credit Suisse by UBS in March 2023 has further shaken the market and highlighted the prevalence of risk management, governance and culture failures and, illustrates the importance of leadership walking the walk when it comes to managing risk.

How we can help

At Mazars we aim to help you develop, strengthen, and embed your enterprise risk management capabilities. We can support your business in a range of ways such as conducting high-level reviews of your framework, detailed analysis of specific elements of your framework and, developing and implementing risk improvement plans. We can help you create your governance, risk and control frameworks further by looking at:

Governance

  • Develop comprehensive and effective governance approaches, including training to understand why risk management is key to your business optimising costs
  • Develop and embed your three lines model, defining risk owners and responsibilities
  • Evaluate the challenge and assurance functions in your organisation

Risk Strategy

  • Structure a risk management framework proportional for your business
  • Define a practical risk appetite statement
  • Review and strengthen how risk management and appetite is adopted throughout the organisation and how risk management is considered in strategic planning

Culture

  • Conduct interviews and review risk management practice to understand how risk management is perceived throughout the organisation
  • Review and strengthen the integration between risk management and performance management
  • Provide risk culture training for the board, executives and staff on a regular basis

Process

  • Establish processes to identify and systematically record risks and KRIs
  • Review and evaluate risk assessment and prioritisation methodology
  • Review effectiveness of key controls, control testing framework and mitigation measures

Reporting

  • Review and develop risk reporting to the business, senior management and the board ensuring the key information is being communicated at sufficient frequencies
  • Ensure data handling and processing supports integrity of risk management and reporting
  • Consider risk forecasting and how this informs your risk management practice

Case Study

Risk management framework review

We supported an Asset Management Firm to establish an integrated risk management framework that is robust, fit-for-purpose and in line with industry requirements. We delivered the following:

  • Reviewed and updated the Terms of Reference (ToR) of the Board and other governance committees to ensure sufficient oversight of risk management practices
  • Assisted management to define and draft the roles and responsibilities for each of the three lines of the business.
  • Drafted the Firm’s Risk Management Framework Policy
  • Developed a common risk taxonomy to ensure appropriate risk categorisation and description.
  • Designed and updated a risk register to be used across all departments
  • Assisted management to establish a consistent risk assessment methodology
  • Facilitated workshop on Risk Appetite Statement (limits, tolerances and triggers) and fundamental components of the Risk Management Framework

Get in touch

For more information on how we can help, please contact us.

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