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Integrated Risk Management

Navigating the complex landscape of Integrated Risk Management

The world of risk management is rapidly evolving, and financial institutions face increasing challenges in this turbulent setting. Under growing scrutiny from regulators, the management board and board of supervisors must balance regulatory compliance with strategic decision-making and realizing business ambitions. They confront challenges such as integrating risk management into business strategies, ensuring organizational resilience, and staying ahead of constantly changing supervisory standards. As financial institutions adapt, boards must also address emerging risks like cybersecurity, ESG risk, and geopolitical instability.

In this high-stake environment, having a well-structured risk management cycle is more critical and more difficult than ever before. At ACE we have a comprehensive and integrated approach to managing all types of risks — financial, operational, strategic, compliance, and emerging risks, across an entire financial services institution.

1. Risk Management Framework

Assess & strengthen framework to ensure organisational readiness

 

To help structure and prioritise regulatory pressure with a sound and reliable governance setup supported by up-to-date, unambiguous and well-structured policies, risk strategy and risk appetite frameworks/statements. Providing a  structured approach to risks and translating that into processes and controls.

  • Risk Governance
  • Policy House
  • Risk Appetite
  • Risk & Controls

2. Supervisory Evaluation

Having a proactive approach to manage supervisory relations

 

Becoming resilient in managing risks and having a proactive approach to manage supervisory relations. Implement effective communication and collaboration with the supervisor/regulator and establish a future-proof risk landscape.

  • Board Dynamics (coaching/supervisory relations)
  • Supervisory Exercise (PMO/QA)

3. Risk Transformation

Ensuring regulatory compliance and timely addressing internal and external concerns

 

Prioritizing early execution and results, while maintaining a clear strategic direction is key for being in control of your risk management organization. Among other things a sound supervisory review & evaluation process (SREP) is key.

  • Regulatory Change
  • Remediation (of findings)
  • RegTech

4. Business Cycle Alignment

Enabling smooth integration of risk management into business planning

 

Embedding risk considerations into core business processes, ensuring that risk awareness is an integral part of strategic planning, operational execution, and decision-making. This helps organisations balance risk and reward effectively, making informed decisions that drive growth and resilience.

  • Strategy
  • Business Planning
  • Risk Culture

The Risk Management Cycle

Through proper identification, assessment, mitigation, monitoring, and review, financial institutions can maintain resilience against the various risks they face. The risk management cycle, incorporating the “Three Lines” consists of:

  1. Risk Identification – Identify potential risks that could impact the institution’s financial health, operations, and reputation. The risk management and compliance functions help establish risk identification frameworks and ensure business units have the tools and knowledge to identify risks properly.
  2. Risk Assessment – Assess the likelihood and potential impact of identified risks. The risk management function provides frameworks and methodologies for assessing risk (e.g., risk scoring or stress testing) and ensures that the assessments are aligned across the organization.
  3. Risk Mitigation – Develop and implement strategies to reduce, transfer, or eliminate risks. The risk management function oversees and provides guidance on risk mitigation strategies, ensuring that controls are effective, and that the organization’s risk appetite is adhered to.
  4. Risk Monitoring and Reporting – Continuously monitor risks and controls, ensuring that risk levels remain within the institution’s risk appetite. Risk management and compliance teams regularly monitor risk levels across the organization, gather data from the first line, and report it to senior management and the board. They also ensure that business units follow the risk management framework.
  5. Risk Review and Improvement – Review and refine the risk management process based on lessons learned and changes in the external/internal environment. The risk management function reviews the overall effectiveness of the risk management framework, updates it as necessary, and implements any corrective actions.

Our Integrated Risk Management experts

Katharina Ortlepp

Senior Manager

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