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Going Hand in Hand: Enterprise Risk Management and Risks Impacting Your Financial Institution

06.03.2016

Enterprise Risk ManagementEmerging risks related to strategic initiatives, security, technology and regulatory requirements are increasingly having an impact on financial institutions. The Missouri financial institution market reflects trends occurring throughout the nation, including a multitude of mergers, acquisitions and new market entries throughout the year. Staying on top of these risks should be front of mind for all levels of the institution – from the front line to the board of directors.

Strategic Initiatives

Strategic initiatives have many risks associated with them. Growth of current products, introduction of new products or technology, or even an increase of the loan portfolio has positive and negative risks. By integrating an enterprise risk management program into the strategic initiative discussions, executives can be more aware of how to stay on top of the impact the initiative is having on the institution and react appropriately to steer the initiative in the desired path.

Technology

Most institutions want the latest technology, but it comes with challenges as financial institutions work to match customer expectations while maintaining a secure environment. As financial institutions implement or monitor their current enterprise risk management program, technology needs and security should be in the forefront. It is no longer a standalone topic, but rather a strategy that is integrated into each facet of the enterprise risk management program.

Security

Enterprise risk management should be designed to be a part of the entity-wide, day-to-day operations. The most common entity objectives are strategy, operations, technology, reporting and compliance.  Security risks are applicable to each objective, so the question is not whether your institution has security risks, but how you identify and handle those risks.

Regulatory Requirements

Interpreting the ever-changing rules and regulations surrounding financial institutions can be difficult. The risk of non-compliance or conformity could mean everything from loss of clientele to regulatory fines for the bank. By incorporating risk discussions into the regulatory requirements as it relates to the overall financial institution’s environment, personnel at all levels of the institution can help mitigate the regulatory risks.

Making Time

For most institutions, time is scarce. Attending countless meetings, running daily operations and keeping up with monitoring risks results in long hours and, sometimes, a lack of focus. Integrating the enterprise risk management program into day-to-day operations will help alleviate some of the duplicated efforts of addressing these emerging risks.

Amy Ribick, CFE, CRMABianca Sarrach, CIA, CFSA, CRMAFor help with implementing or revamping your current enterprise risk management program or other financial institution needs, contact Amy Ribick, Principal, Advisory Services, at 314.983.1347 or aribick@bswllc.com, or Bianca Sarrach, Manager, Advisory Services, at 314.983.1365 or bsarrach@bswllc.com.

Team

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