banking update for eastern connecticut chamber of commerce
TRANSCRIPT
BANKING UPDATE FOR EASTERN CONNECTICUT
CHAMBER OF COMMERCEJED Consulting Services
Agenda
Key updates on Risk Management and environment
Brief recap of Enterprise and components Risk Appetite
Consulting approach- What we see is happening across the country and in industry
Real world perspective—How you can develop your program
Where we are: Current Issues
Global economic crisis Credit crisis Liquidity and capital crunch Chaotic market
Governmental Capital Injections
Where we are Current Issues
Changing Regulatory Environment Increasing expectation Regulatory investigations and enforcement
actions Cost of compliance
Reputation Risk Bank Failures/Receiverships Shareholders/Analysts/Investors/Customer
Corporate Accountability
Expectations for Director Oversight of Risk Management is Rising
Regulatory Expectations Federal Sentencing Guidelines Listing standards Rating Agencies now focusing on ERM
practices
Regulatory Concerns
Operational Risks vs credit risk
External Risks
Regulatory/Legal Investor relations Competitor Financial markets Catastrophic loss Soveriegn/Political
Information Risks
Product/Service Pricing Performance Measurement Budget and Planning Accounting information Financial reporting
Technology Risks
Access Availability Infrastructure
Financial Risk
Price Liquidity Credit
Integrity risk
Ethics Fraud Unauthorized use Reputation
Strategic Risk
Leadership Alignment Planning Communication Business Model
Global Risks: Economic Risks
Asset price collapse Extreme commodity, consumer and
energy price volatility Fiscal crisis Global imbalances and currency volatility Liquidity/credit crunch Regulatory failures Retrenchment from globalization Slowing Chinese economy
Geopolitical Risks
Corruption Fragile states Geopolitical conflict Global governance failures Illicit trade Organized crime Space security Terrorism Weapons of mass destruction
Enterprise Risk Management
Is a process designed to identify potential events that may affect entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives.
KEY DEFINITIONS
ERM Philosophy Value entity seeks influences how it is applied
Risk Appetite Related to strategy and qualititative or
quantitative Risk Culture
Shared attitudes, flows from philosophy appetite and subcultures
ERM Governance-Top Down Approach
Strategic Objectives A high level goal aligned with mission
Events An incident or occurrence originating from
internal or external sources Influencing Factors
External and internal Event identification
Methods and techniques to recognize activities and measure impact throughout the organization
Risk and Performance Management
Understand key risk areas of company Review company’s approach to managing
risk and evaluate processes in place to monitor and control those risks
Document extent executive management comprehend and consider risks
Risk and Performance Management
Understand fraud risks and ensure management have implemented adequate controls to mitigate fraud
Understand how costs of compliance are evaluated to help improve performance
Weigh in on strategy and risk
Some Risk Events to consider
How do you capture risk events Do we know the unknowable events that
could impact our enterprise
How to identify major themes
Market Strategic Operations
Market Risks
Macro economic Customer economics Financing Competition Consolidation
Strategic
Right Solutions Business Model Brand and Marketing Growth Acquisition Organization design and resources
Operations
Facilities Business Disruption Policies and procedures Decision making Systems capabilities Authorization Cost and efficiencies Customer service
Risk: Strategic
Business Model Our business model may not meet the needs of
our customer and markets ,nor achieve the profitability and growth goals that we have established .
Risk: Financial
Margin We are unable to sell our products and solutions
at sufficient profit margin due to competitive pricing pressures and increased costs
Risk: Operations
Contracting The contract demands from our customer may
become more and more complex, impacting our ability to meet their demands as well as properly bill and collect
Customer service We may not be able to fulfill our customer
expectations and/or provide quality customer service and be expensive
Risk : Market
Financing Customers may be unable to obtain financing
for our solutions Industry consolidation
Consolidation in our industry may allow our competitors gain market share, reduce costs and hire talent from our company
Product Innovation Competitors may introduce new solutions to the
market disrupt our value proposition significantly.
Do we have a risk appetite statement
Why JED Consulting? Business Continuity Plan
JED Consulting experienced IT professionals apply a risk-based impact analysis to advise on development, implementation, and maintenance of a comprehensive Business Continuity Plan is tailored to meet the needs of your organization
Why JED Consulting? Network Security Review
JED Consulting’s experienced IT professionals can conduct a complete and cost-effective analysis of your network security and provide prescriptive recommendations
Why JED Consulting: Network Security Review
Test internally takes place at your location and externally by using our state-of-the-art test lab
Utilize industry leading evaluation tools, testing is designed to discover weaknesses in the network components that protect the network from external and internal threats and vulnerabilities