The recent financial crisis showed the importance of risk management for financial institutions. A key success factor of institutions less affected by this crisis was the alignment and adequacy of risk management with their specific business model. To achieve this four elements have to be implemented:

• Adequate approach, processes and systems for risk limiting and capital allocation, based on the business model and the available risk capital
• Adequate processes and instruments for risk monitoring for new or proposed deals as well as on portfolio and on bank level; these need to also take future expected portfolio developments into account
• Adequate, forward looking simulation and stress-testing-procedures to forecast possible macroeconomic developments using realistic scenarios and including correlation, cluster effects and interdependencies between risk types
• Adequate, standardised but flexible reporting and analytical tools with target-customized reports for all levels (supervisory board, management board, C and B-Level etc.) that provide a concise and accurate picture of the risk situation, its development and measures taken or to be decided.

How BearingPoint brings value

BearingPoint provides a comprehensive portfolio of proven services in all areas of risk management, including: 

• Development of risk strategies aligned to business models and corporate strategy
• Optimisation of risk processes (limit management, capital allocation, risk monitoring)
• Implementation of risk oriented pricing and business strategies
• Implementation of a contemporary, consistent and comprehensive risk measurement for all risk types and portfolios
• Implementation of integrated simulation and stress-testing-tools, adapted to the specific business models and fulfilling the requirements of both modern risk management and latest banking regulation.
• Investing in contemporary risk management will uncover hidden potential in the organisation by helping to optimise the risk-performance relation; avoid unprofitable or unwanted risk; reduce process cost and improve process quality; and provide management with a better instrument to steer the business.