Financial Crime World

Comprehensive Guide to Risk Management: Trends and Future Developments

Introduction

The Chartered Governance Institute’s risk management program is a comprehensive outline that covers various topics related to risk management. This guide will take you through key points from the outline, including risk control strategies, risk management in practice, trends and future developments for risk management, and more.

Risk Management

Key Concepts and Strategies

  • Risk Control Strategies:
    • Tolerate: accept a level of risk without taking action
    • Treat: implement controls to mitigate or manage the risk
    • Transfer: shift the risk to another party (e.g. through insurance)
    • Terminate: eliminate or avoid the risk
    • Take the opportunity: use the risk as an opportunity for growth
  • Reasons for Risk Control:
    • Managing probability and impact of loss events
    • Using controls to help seize opportunities

Common Applications of Risk Management Practice

  • Operations/Operational Risk Management: managing risks related to business operations
  • Cyber Risk Management: protecting against cyber threats and data breaches
  • Project Risk Management: identifying, assessing, and mitigating risks in projects
  • Supply Chain Risk Management: managing risks associated with supply chain disruptions

Risk Management in Practice

Key Roles and Functions

  • Company Secretary and Governance Professionals: responsible for ensuring compliance and governance
  • Compliance Function: ensuring that the organization complies with laws and regulations
  • Finance Function: managing financial risks and ensuring accurate financial reporting
  • Health and Safety Function: ensuring a safe working environment for employees
  • Information Technology Function: managing IT-related risks and implementing cybersecurity measures
  • Risk Function: identifying, assessing, and mitigating organizational risks
  • Other Business Functions: all other departments and teams within the organization

Emerging Risks

  • Crime:
    • Offences against individuals, property or services
    • Violation of laws
  • Countering Workplace Crime
  • Cybercrime Prevention
  • Financial Crime:
    • Anti-money laundering (AML)
    • Countering the financing of terrorism (CFT)
  • Bribery and Corruption
  • Political Risk, including sanctions

Managing Behavioural Risk

  • People Risk: managing risks associated with employee behavior
  • Common Sources of Behavioural Risks:
    • Bullying
    • Negligence
    • Information leaks

Complex and Connected Risks

  • Managing risks that are interconnected and complex in nature

Emerging Risks: The Networked Economy, Social Media, and Digital Natives

  • Understanding the impact of emerging technologies on risk management

Managing Emerging Risks

  • Board Level Strategic Environment Emerging Risk Assessments: identifying and assessing emerging risks at a strategic level
  • Scenario Planning and Reverse Stress Testing: anticipating and preparing for potential future events

Changing Knowledge and Skills: In-Demand Skills, Talent Sourcing, Talent Management, and Talent Training

  • Developing the skills and knowledge required to manage risk in a rapidly changing environment

Digital Transformation: Big Data, Automated Decision Making, and Artificial Intelligence

  • Understanding how digital transformation is impacting risk management and requiring new skills and expertise.