The hallmark of a healthy enterprise risk management (ERM) system is the ability to assess risk in a uniform fashion. This is especially true for financial institutions with multiple branches; it’s important to consider each of their risks as your own, and standardizing this process across the board can help streamline your processes tremendously and set your entire business up for success.
For financial institutions adopting a risk based approach and an objective risk assessment solution, you can identify the overlapping activities that crowd your program, prioritize actions and help your branches make more informed decisions. Read on to learn about LogicManager’s comprehensive Branch Risk Assessment solution package.
Brank Branch Risk Assessment Risks
Conducting branch risk assessments is an essential part of your ERM program. When your ERM program falls short, risks that once posed minimal threat to your organization can quickly snowball. Failure in critical ERM processes like risk assessments can lead to a rating downgrade or warning flag or business continuity failures and product liability issues.
Without a complete ERM program, you’ll be left without evidence to prove you were not negligent. Considering the fact that regulatory penalties, fines and shareholder value decline can add up, it’s important to for any financial institution to prevent risk management deficiencies wherever possible – and it all starts with better risk assessments. This will allow them to achieve regulatory compliance.
On a more immediate scale, failure in branch risk assessment can lead to the following consequences:
Lack of Continuity: Changes in the organization or development of new business lines may result in new activities even though existing ones are more effective.
Lack of Coordination: Often, activities apply to multiple risks or commitments across functional lines. The inability to formally tie activities to risk or commitments hinders inter-functional coordination, resulting in business silos and duplication of effort.
Activity Fatigue: Staff may ignore certain activities because of a lack of time to assess them.
Wasted Resources: If a risk changes, most branches would have no way of knowing how (or even if) these changes will affect their resources and activities.
Activity Obsolescence: In a changing environment, there is no effective way to know when activities no longer apply.
Lack of Prioritization: Picking activities to focus on is likely to be on an ad hoc basis and subject to the whims of current staff.
Conduct Branch Assessments with LogicManager
Organized risk assessments
Use a risk assessment to easily identify bank risk themes across your branches as well as gaps in controls and processes. It’s also important to gain insight into location-specific risk factors (like susceptibility to natural disaster, number of employees or departments, etc.) to truly understand your risks on an enterprise level.
Centralized risk library
LogicManager’s out of the box bank risk library will benefit your organization by uncovering dependencies across departments and branches while also standardizing the language across your entire organization. This gives teams an approachable starting point to complete their risk assessments.
Manage controls with purpose
Create and maintain your control repository with strategic bank goals in mind. This can be done easily since all of your branches and departments have the ability to reference what other locations are doing to control risk.
Keep documents readily available
With the ability to attach documentation directly to a risk assessment in a variety of formats, you can provide the necessary information when someone comes knocking on your door. The organized risk assessments, standardized risk library, central control repository, monitoring of controls, etc. are all easily exportable into reports.
At the end of the day, your bank risk assessments should give you a better understanding of what each branch is up against. This will allow you to appropriately allocate resources to reinforce where needed.
Gain a comprehensive understanding of operational risk
So each branch has conducted their initial risk assessment; now it’s time to ensure you understand the continued operational risks associated with each. Using LogicManager, you can determine the metrics that constitute success and the resources needed to scale continually.
LogicManager’s Branch Assessment Solution
Here are more details on what you can expect with LogicManager’s Branch Assessment solution package for banks:
Branch Risk Assessment template: This consists of a standard list of risks, mitigations and KPIs to consider for your branch assessment. Use these as a baseline to get a sense for feasibility and risk appetite and ensure that you’re monitoring performance over time. Copy these from plan to plan to ensure consistency across assessments, while allowing for unique risks, controls or monitoring activities per branch.
“Set it and forget it” cadence: LogicManager allows you to create an automated, recurring task to update the risk assessments at each of your branches so that you can always be confident that you have the most accurate, up to date information from each branch.
Suggested mitigations: Branches are able to easily look at what other branches are doing to mitigate the same risks by using our “Suggested Mitigation” feature. This breaks down silos across different branches and creates efficiencies as there are likely to need to be similar policies and procedures across the entire enterprise.
Incident management: From fraud and security incidents to slips and falls, there are many different types of negative events that banks should be able to keep track of. LogicManager’s incident forms allow you to lay a foundation of common questions and factors to consider for each branch, with the option to open this to a wide audience or keep it focused to a core group.
Reporting capabilities: easily generate and export reports, including our Risk Control Matrix, Plan Report and Risk Assessment Dashboard.
Request a Free Demo Of LogicManager’s Bank Branch Risk Assessment Tools
To see how LogicManager can help you communicate across branches, collect actionable information and ultimately set your organization up for success, request a free demo of our Branch Risk Assessment solution today.
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