NEW YORK, NY--(Marketwired - August 22, 2016) - New rules and regulations have proliferated across the financial sector, with no end seemingly in sight. Along with fast-paced technology, stirring more competitive pressures than ever; it is essential for banks and financial institutions to instill sound management to properly oversee and control heightened risks.
Crystal Humphreys, Senior Vice President, Operational Risk - Governance and Operations at Zions Bancorporation, recently spoke with marcus evans about approaching a risk governance framework:
Why is consistency difficult to achieve with an operational risk governance framework?
CH: A key challenge of achieving consistency with an operational risk governance framework is the broad scope of operational risk. Operational risk is comprised of various categories, (e.g., internal and external fraud, employment practices and workplace safety, failures in delivery and process management), and each category typically requires specific and unique methodologies to assess, understand, measure, monitor and manage them.
Additionally, operational risk is imbedded in all areas of an organization as it applies to all people, processes and systems, which are continually evolving due to drivers such as technological advances, evolving customer demands and behaviors, and regulatory expectations.
What are the regulators looking for in operational risk governance frameworks? What methods have you implemented to approach governance oversight?
CH: Regulatory agencies have issued general guidance for operational risk frameworks. However, each bank must determine specifics for establishing and implementing a framework appropriate for its asset size and complexity. In general, regulators expect operational risk governance frameworks will include programs to assess, understand, measure, monitor and manage the various operational risks in alignment with the company's risk appetite framework and three lines of defense. At a minimum, it should include risk assessment programs, second line of defense oversight and challenge functions, processes for early identification and escalation of realized and emerging risks, and governance requirements that establish a consistent approach to managing operational risk.
Join Crystal at the 2nd Annual Operational & Information Risk Management for Banks & Financial Services Conference, September 21-22, 2016 in New York, NY. View the conference agenda to check out Crystal's case study topic. For more information, please contact Tyler Kelch, Digital Marketing Manager, marcus evans at 312.894.6310 or Tylerke@marcusevansch.com.
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