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Risk Management in Banking: A Key Aspect of Operations in Jamaica

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The Jamaican banking sector is constantly evolving, with institutions facing numerous risks that can impact their operations and ultimately affect the economy as a whole. In this environment, risk management has become an essential aspect of banking operations.

The Role of [Bank Name] in Risk Management

[Bank Name] is leading the way in risk management, with Odean White, Chief Risk Officer (CRO), overseeing the Corporate Risk Management Department (CRMD). The CRMD plays a critical role in supporting the Board and Management in designing and implementing the bank’s risk management strategies and objectives.

Scope of Work

The department’s scope of work includes:

  • Identifying, measuring, monitoring, controlling or mitigating financial, non-financial, and compliance risk exposures across the bank.
  • Active engagement with “risk owners” and “risk champions,” who are responsible for deploying risk management strategies, policies, procedures, and systems across the organization.

Risk Management Practices

The CRMD carries out its operations consistent with contemporary risk management practices and standards, utilizing:

  • Risk measurement methodologies
  • Periodic risk assessments of key risk exposures and key risk indicators

Collaboration and Reporting

The department works closely with business units and management-level committees to ensure that soundness of controls and robust risk monitoring mechanisms are in place. Regular reporting and updates on the implementation of risk management policies and treatment plans for key risks relative to the bank’s risk appetite/tolerance levels.

Professional Standards

The CRMD subscribes to International Organization for Standardization (ISO) standards, namely:

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

The department is also guided by standards and codes of conduct stipulated by recognized professional organizations, including:

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

Interview with Odean White, CRO

In an interview, White emphasized the importance of risk management in banking, noting that it is essential for banks to identify and mitigate risks to ensure the stability of their operations and the overall economy.

“Risk management is a critical component of our operations,” he said. “We must be proactive in identifying and mitigating risks to ensure that we are operating within our risk appetite/tolerances.”

Conclusion

As Jamaica’s banking sector continues to evolve, it is clear that risk management will play an increasingly important role in shaping the industry’s future. With [Bank Name] at the forefront of this effort, it is likely that the institution will continue to be a leader in risk management and a model for other banks to follow.