Jamaican Financial Institutions Grapple with Risk Management Challenges

As the Jamaican financial sector continues to evolve, institutions are being forced to adapt to an increasingly complex risk landscape. Amidst this backdrop, the Corporate Risk Management Department (CRMD) has emerged as a crucial player in ensuring that banks and other financial institutions are equipped to manage risk effectively.

The Role of CRMD

At the helm of CRMD is Chief Risk Officer Odean White, who is responsible for designing and implementing risk management strategies and practices tailored to each institution’s unique business model and activities. White believes that effective risk management is critical to achieving an organization’s mandate and ensuring its long-term sustainability.

Scope of Work

The CRMD works closely with “risk owners” and “risk champions” across the Bank to develop and deploy risk management strategies, policies, procedures, and systems. The department’s scope of work includes:

• Identifying, measuring, monitoring, controlling or mitigating, treating, and reporting on financial, non-financial, and compliance risk exposures.

Contemporary Risk Management Practices

To achieve this, CRMD utilizes contemporary risk management practices and standards, including:

• Risk measurement methodologies
• Periodic risk assessments of key risk exposures and indicators
• Collaboration with business units and management-level committees to ensure sound controls and robust risk monitoring mechanisms

Reporting and Oversight

As the Bank’s Chief Risk Officer, White is tasked with overseeing the overall design, implementation, and oversight of risk management strategies and practices. He reports functionally and administratively to the Governor and has access to:

• The Audit and Risk Committee
• Regular updates on the implementation of risk management policies and key risks relative to the Bank’s risk appetite/_tolerance levels

Quarterly Reports

The CRMD also provides quarterly reports to the Risk Management Committee, a management-level committee chaired by the Senior Deputy Governor, as well as periodic reports to other committees such as:

• The Investment Committee
• Pension Management Committee
• Committee of Administration

International Standards and Codes

In its professional approach to risk management, CRMD subscribes to international standards adopted by the Bank, including:

• ISO 31000:2018 (Risk Management - Guidelines)
• ISO 22301:2019 (Business continuity management systems - Requirements)

The department is also guided by the standards and codes of conduct stipulated by recognized professional organizations such as:

• The Institute of Risk Management
• Society of Actuaries
• Chartered Financial Analysts Institute
• Committee of Sponsoring Organizations of the Treadway Commission
• Global Association of Risk Professionals

Conclusion

As the financial sector in Jamaica continues to evolve, it is clear that effective risk management will be critical to achieving long-term sustainability. With CRMD at the forefront of this effort, Jamaican financial institutions can rest assured that they are well-equipped to navigate the complex risk landscape and achieve their goals.