Contemporary Risk Management
The recent financial crisis underlined the importance of risk management for financial institutions. Indeed a key success factor of institutions less affected by this crisis was that they had aligned effective risk management with their specific business models.
Strong risk management involves four elements:
- Adequate approach, processes and systems for limiting risk and capital allocation, based on the business model and the available risk capital.
- Adequate processes and instruments for monitoring the risks of new or proposed deals as well as on a portfolio and 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, standardized but flexible reporting and analytical tools with target-customized reports for all levels (supervisory board, management board, C and B-Level etc.). These need to provide a concise and accurate picture of the risk situation, its development and measures taken or to be decided.
How BearingPoint brings value
We provide a comprehensive portfolio of proven services in all areas of risk management, including:
- Development of risk strategies aligned to business models and corporate strategy.
- Optimization of risk processes (limit management, capital allocation, risk monitoring).
- Implementation of risk oriented pricing and business strategies.
- Implementation of 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 your organization by:
- helping to optimize the risk-performance relation
- avoiding unprofitable or unwanted risk
- reducing process cost and improving process quality
- providing management with a better instrument to steer the business