Phylicia Manley’s Post

Regulators Are Making it Clear: Banks & FinServ Firms Must Become Resilient Under increased scrutiny from regulators, firms must prioritize compliance and ensuring proper risk management and internal controls are in place. Reach to learn how RapidRatings can strengthen your firms third-party risk management program. #thirdpartyriskmanagement #tprm #regulatorycompliance #financialservices #banking #vendorrisk #vendorriskmanagement #vrm https://lnkd.in/e-pkyC9k

Banks are confidently navigating the potential challenges in the commercial real estate market with sophisticated risk management strategies, technological advancements, and stringent regulatory compliance. #CommercialRealEstate #BankingSector #RiskManagement #FinancialStability #CREInvestments #TechnologyInBanking #SustainableInvesting https://lnkd.in/drb5GVVY

🗣 OakNorth's new chief risk officer Mark Steele and outgoing CRO James Cashmore, who is retiring, spoke to Ellesheva Kissin about the UK Challenger bank's overall management of risk and its expansion into the US. 👀 The bank's risk function is split into five teams that specialise in operational risk, IT and cyber compliance, financial crime, prudential risk and enterprise-wide risk. 🌍 Numbering fewer than 30 people in an institution of 700, the function outsources some roles to its operations in India. “We’re leveraging technology so [we] don’t need to keep building teams, and keep adding headcount,” Cashmore says. 🏢 “We don’t have entire teams or entire floors of people in Canary Wharf, looking at the risk, but in some ways, maybe that makes it easier to manage because … with additional humans, you have additional risk of human error.” 🏰 On following the traditional three lines of defence model, Steele says: “[I’ve] seen lots of structures in my time: one, two, three, one-and-a-half and everything else. Fundamentally, it comes down to collaboration, openness and an understanding of the risk profile at every line of defence.” 🔇 The bank’s three lines get together every month to debate the top risks, says Cashmore: “I don’t think our top risks are different to any other bank … (we) obviously watch liquidity very carefully. We plan our capital ahead, so we’ve got plenty of capital for our growth trajectory. And we spend a lot of time of course on credit risk, (which is) really one of our specialisms.” 💡 The risk function is part of a new wave of thinking: to be closer to the front line. Cashmore explains: “[It] can be seen unfairly, I think, sometimes as a blocker. What we’ve tried to be is an enabler … actually getting involved in the design stage, in the test and learn stage. We go a little bit beyond the traditional three lines of defence model.” https://lnkd.in/eqfxfbkT #1LOD #3LOD #riskmanagement

Operational risk is a silent yet formidable challenge that significantly impacts lending institutions and #creditmanagement management. In the dynamic landscape of financial services, the potential threats arising from operational failures, such as system breakdowns, human errors,compliance risk,data security risk,process risk, or even external fraud, can have cascading effects on a lender's ability to manage credit effectively.  These #risks , if not mitigated with robust #operational risk management strategies, can lead to financial losses, reputational damage, and, most crucially, compromise the institution's ability to uphold the trust of its stakeholders. Managing the complexities of credit management requires not just a keen understanding of #financial metrics but also a proactive approach to identify, assess, and mitigate operational risks, ensuring the resilience and stability of #lending institutions in an ever-evolving financial landscape.

US regulators are highlighting the importance of financial institutions bolstering their operational resilience, especially in relation to third parties. Fusion Risk Management's team is collaborating with multiple organizations to improve their oversight of third-party vendors and enhance operational resilience. #FinancialInstitutions #Regulations #OperationalResilience

Despite a robust set of rules which have not been embraced or enforced sufficiently, regulators will take the oportunity to drive these points home. Personal cease and desist orders should be a wake up call for risk managers and board committee members who lack the experience or commitment necessary to perform these functions with rigor and perspective. #continentalinsights#governance#riskmanagement#regulatoryperspective

“Compliance teams across financial institutions should heed the OCC's enforcement actions as a wake-up call to reassess risk management frameworks, particularly in areas such as BSA/AML compliance, capital planning, and strategic risk management.” More on the agency’s regulatory crackdown via GRC Report: https://lnkd.in/gpsR3EkN #RegulatoryCompliance

🛡 It has become fashionable to say the first line of defence needs beefing up. I’m a strong advocate of this principle, writes Dr. Jeffrey Edwards, MBA, CQF, CSSBB. 🏦 Having worked in senior roles at Wells Fargo and Bank of America, when the business is empowered to own risk we get better business outcomes. ❗ Supervisors are increasingly taking a direct interest in how daily risk management decisions are made on the shop floor. But what happens — either through personnel, process or design — when something goes wrong? 😡 Each case is specific, but my view is that 1LOD is too quick to be blamed. We hear that banks’ first line of defence have “assumed too much power by default”. This is “compromising” risk management and appetite, the critics say. 🤙 I disagree with this position wholeheartedly. I strongly believe that 1LOD needs to be granted tougher controls. 👀 Read more below ⬇ https://lnkd.in/efbaYBBz cc 1LoD Didier Magloire John Baskott Paul Hodge

Navigating Operational Hazards: Safeguarding the Financial Horizon - An in-depth exploration of Operational Risks in Banking and Financial Institutions, and the imperative of robust risk management practices  https://lnkd.in/dB6Y34TD

Check out Treliant's take on the FDIC's 2023 Risk Review!