April 4, 2017
TAKEAWAYS OF #ABARISK 2017
We spent the beginning of last week at the American Bankers Association Risk Management Conference in Indianapolis, Indiana; this year’s theme: The Dynamics of Risk.
This is one of our favorite events to be a part of each year for a number of reasons. By now, we tend to see a lot of the same people who also make it a priority to attend year after year, and it’s always nice to catch up and watch how those relationships evolve. Second, as the event grows, we also get to meet a lot of new people each year, which is equally as fulfilling.
And finally, the ABA Risk Management Conference is uniquely designed around the topic we care most about—the full range of risks that face banks today and in the future. We love engaging in dialogue with other experts and learning ways we can innovate to anticipate the needs of our current and future customers.
There was a lot of knowledge and wisdom transferred last week, but for the sake of respecting your time, here are just a couple takeaways from the featured topics of discussion of the 2017 ABA Risk Management Conference:
A New ERM Framework
One of the most widely recognized and applied risk management frameworks across the world, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) ERM-Integrated Framework, was originally developed in 2004 to provide guidance to boards and management. 13 years later, the landscape in which this guidance was created has evolved dramatically—risk discussions are increasingly prominent at the board level, stakeholders are seeking greater transparency, and all around the bar for ERM has risen—and now the COSO Framework is adapting. The proposed changes to the COSO ERM Framework will elevate discussions on strategy and enhance the focus on how entities create, preserve, and realize value in relationship to risk.
Annual Review Best Practices
Annual reviews should be performed to ensure that model owners are carrying out and regularly documenting appropriate performance testing for each model, as well as to identify any changes in performance, the environment, staff, etc., and to provide input for risk-reporting to management and the Board. To make the most out of your annual review, you should collaboratively leverage the ongoing roles of each line of defense by splitting the work among project managers, validators, and first line staff and have all necessary validation material ready to go before the process begins. It’s also a good idea to use a validation report template that can be filled in as the material arrives from various sources.
Thanks again to the ABA for another great event! To learn what VendorInsight® is doing to keep pace with the ever shifting regulatory environment and new wakes of risk that your bank may be facing, follow the links below.