Optimising the management of risk is a fundamental part of the success of every organisation.
Ultimately, Risk Management aims to allow a business to effectively identify and manage things that may threaten them to achieve their objectives. With more and more interest from the Regulator on Risk Management within Financial Services, even more emphasis is being put on it to ensure compliance and demonstrate ownership and embedding in the business.
Risk appetite, Risk methodology, Risk policies and standards, Risk governance, the key components of the framework are present in some form in all financial services organisations. It is the degree to which these are embedded within the business that differentiates them and determines their risk maturity level.
We have all worked in companies where sophisticated tools and processes exists and are perfectly documented yet still, it doesn’t quite work. And it won’t – if not underpinned by right level of risk culture. The risk culture underpins the risk management framework. It makes it real and practical.
Employees, at all levels, need to understand how to make educated risk-based decisions to ensure consistent risk behaviours across the organisation.
There is usually a lot of effort being spent on the development and roll out of risk frameworks and training programmes. These make great first educational steps on the journey, however if not supported by wider embedding strategy, the organisation won’t maximise the benefits.
The embedding strategy needs to be carefully tailored to the business. Each company has its own history. A range of internal factors, such as maturity level, leadership tone and the history of past experiences play an integral part of the assessment and contribute to the approach to risk management needed for the company.
How well is risk management embedded in your business? Does your organisation have an embedding strategy in place?
At Simplify, we work with businesses to help them embed risk management effectively. Contact us today if you would like us to assess your Risk Capability model and discuss how we can support you: email@example.com.