Heightened regulatory requirements and scrutiny post the Global Financial Crisis have forced financial institutions to take a hard look at the integrity of their risk management governance, policies & procedures and placed greater emphasis on risk in the agenda across banks' Board of Directors, CEOs and Senior Management.

In our work with our clients, we have assessed a need for more effective risk management to optimize risk-reward trade-off and ensure sustainable business growth whilst aligning regulatory and shareholder expectations. Banks going through growth or transformational phases face challenges on account of:

• Inability to keep up with the ever tightening regulatory environment
• Inadequate risk controls and governance during organic/ inorganic growth
• Legacy risks in certain portfolios, business lines

Ever-changing business landscape also means that mature banks need to keep assessing their risk management framework to ensure that enterprise and business/vertical level risk management building blocks are robust and in a state of preparedness to mitigate risks on an ongoing basis.

Banks, realizing the need for regular reviews of risk systems either to meet regulatory requirements or shareholder expectations have initiated periodic internal reviews of their risk monitoring facilities but these remain largely audit focused in nature with the emphasis on ascertaining whether policies and procedures are being adhered to.

Arete helps bank in strategic and focused evaluation which is forward looking, emphasizing on identifying new risks and opportunities. We benchmark current risk organization with industry best practices and help build decision making, diagnostic and preparedness tools for Senior Management. Our strategic assessment benefits banks by having checkpoints in place that ensure that business decisions taken are aligned to their risk appetite and culture.

 

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