Credit risk is one of the significant risks for banks and financial institutions across the globe, and it can lead to significant financial and reputational losses. Credit risks emerge due to the possibility of defaults on debt obligations, wherein a borrower fails to pay back the dues to the lender. Banks must proactively manage their …
Credit Risk Management in Banking: Challenges and Solutions Read More »
Credit risk is a major financial risk that occurs when a borrower or entity fails to repay the owed principal and interest to the bank or financial institution. Payment defaults may occur on credit cards, mortgages, fixed-income securities, etc. It is a significant concern for financial institutions and investors as it can lead to: Financial …
A Guide to Credit Risk Management for Banks and Financial Institutions Read More »
Control testing assists banks and financial institutions to evaluate their internal controls, including corporate governance & accounting processes, to mitigate risks, meet regulatory compliance, detect and prevent fraud, and optimize operational efficiency. According to the Committee of Sponsoring Organization of Treadway Commission (COSO), “internal control is a process, effected by an entity’s board of directors, …
Internal Control Testing: 10 Best Practices for Banks Read More »
Internal controls help banks and financial institutions detect mistakes, fraud, and non-compliance, and reduce risks. In addition, control testing plays a vital role in assessing these internal controls and is critical to ensure they are working as intended. With effective control testing, banks can determine the existing and emerging risks, gaps, and weaknesses in the …
How to Implement Control Testing Programs to Mitigate Risks in Banks Read More »
Banks and other financial institutions face a wide range of enterprise risks that can impact their operations, financial stability, reputation, and customer trust. Implementing and testing internal controls in banks — i.e., policies, procedures, and practices — can help financial institutions mitigate these risks and establish a robust and risk-resilient ecosystem. The following points summarize …
The Role of Control Testing in Mitigating Enterprise Risks in Banking Read More »
The banking industry has experienced some of the most unprecedented transformations in recent years. To navigate the complex regulatory landscape while ensuring success, safeguarding reputation, and stakeholder trust, banks must maintain strong and effective governance, risk, and compliance (GRC) management systems. It helps banks to anticipate and manage potential business risks and ensure they remain …
Best Practices for Effective Governance, Risk, and Compliance Management Read More »
A comprehensive risk management strategy is critical to addressing the risks and threats banks and financial institutions encounter throughout their operational lifecycles. Banks need to be agile and proactive in their approach to risk management for making informed decisions and safeguarding their assets and reputation. Risk Management Lifecycle is a holistic and structured approach to …
Risk Management Lifecycle for the Banking Industry Read More »
Governance, Risk, and Compliance (GRC) refers to organizations’ strategy for corporate governance, risk management, and compliance with government laws and industry regulations. It helps banks and financial institutions manage/mitigate risks and ensure regulatory compliance while safeguarding sensitive data, their reputation and improving their bottom line. In this blog, we will discuss the importance of GRC …
Governance, Risk, and Compliance in the Banking Industry Read More »
The financial sector is one of the most risk-prone industries, and banks are at the forefront of this risk. Banks need to continuously manage and monitor various risks due to credit and liquidity issues, market volatility, operational disruption, cybersecurity incidents, environmental, social, governance (ESG), etc. Enterprise Risk Management (ERM) plays a critical role in mitigating …
Benefits of Enterprise Risk Management in the Banking Sector Read More »
Enterprise Risk Management (ERM) is a top-down approach to managing organization-wide risks, ensuring profitability, performance, and regulatory compliance. The practice of ERM is crucial in banking as it can help banks and other financial institutions prevent, detect, assess, and mitigate risks due to operational disruption, financial volatility, non-compliance, regulatory violations, etc. However, ERM implementation in …
How to Overcome Potential Challenges in ERM Implementation Read More »