Risk Analysis Management
Question: We are developing a risk analysis for compliance as well as other issues. Is it better to have a risk analysis done around regulations or around business lines or products?
Answer: There is no set method for approaching risk management. Basically, any way that works is ok. So the real question, before setting out on the analysis, is what method will best measure risk in your institution. You should also consider what method will be most useful to you when risk is identified. Generally, from a management perspective, a risk analysis by product or function will fit best with how the job gets done. It may also be the best match with skills and responsibilities of different people in the bank.
On the other hand, keeping track of regulations and the risk generated by them is always a good idea. One way to use regulations is to identify the regulations and the related risk for each product or service. This provides you with a consistent method of training, assigning responsibilities, and tracking accomplishments.
Copyright © 2004 Compliance Action. Originally appeared in Compliance Action, Vol. 9, No. 15, 12/04
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