Regulatory authorities have time and again issued instructions & guidelines to Financial Services entities to set high standards in governance especially for aligning Risk with Business Strategy. The “risk appetite” of a Financial entity is the aggregate of all levels and types of risk it is willing to take in order to achieve its strategic business objectives. A Financial entity’s Risk Appetite Framework is the overall approach to establish, assess and monitor risk appetite. It considers the various risks to the entity as well as to its reputation. It is an integral part of the risk governance framework that establishes the strategy as well as risk approach of a financial services organisation. It enables them to quantify the limits and then measure risks to be able to control and mitigate them. These Risk limits are specific quantitative measures or limits based on aggregate risk appetite of an entity. This risk profiling safeguards financial services entities to take appropriate actions across all risk categories and exposures.
Subsequent to multiple crises, the Financial Services Sector felt the need for an Enterprise Risk Management (ERM) framework.
The need of the hour for organisations is to transform their ERM framework to be forward-looking and align Risk Governance with organization’s strategic business goals.
Effective risk response planning requires quantitative approach to risk awareness. This is achieved through data and metrics – the key risk indicators (KRIs).
ERM also enables forward-looking strategic risk insights to track mitigation plan and effectiveness. It requires setting limits, analysis of data, working on probability of occurrence to get a quantified score viz-a-viz the threshold limits. That is where quantitative key risk indicators (KRIs) come into play. For each top risk, quantitative KRIs are defined to help anticipate when a risk might occur. Risk owners will be able to determine when and how to escalate risks for corrective discussions and actions. KRIs serve as the triggers to support actionable risk monitoring. Thus a robust ERM eventually serves as a tool for taking actions towards mitigation. Such quantifiable ERM framework has a holistic approach to Risk Control than just be qualitative tool for reporting.
IDBI Intech sepcialises in creating such niche complex thorough digital solutions which will enable a structured approach towards managing organizational risks for a Financial Entity.
The ERM system is a step change in bringing a multi level quantifiable risk identification, assessment, control and mitigation approach. Intech works closely with customers from the conceptual stage, building the framework to development and deployment of the solution. It helps customers accurately understand risk exposure at multiple levels in their organization.
The key features of the solution are:
- 1. Risk & Control Self-Assessment (including risk aggregation and risk quantification & analytics)
- 2. Top Risks & Key Risk Indicators
- 3. Incident & Operational Loss Management
- 4. Issue & Action Plan Management for tracking actionable status
- 5. Risk Appetite
- 6. Enterprise Risk Management Reports and Graphical Dashboards
- 7. Data Repository
- 8. Technical requirements like information security
Built on latest technology this solution adds immense strategic value to financial entity and enables it to be aligned with regulatory requirements as well.
Awards & Recognition
We are proud to be the leaders in Enterprise Risk Management (i-ERM) Solution by Integrating Disruptive Technologies.
i-ERM redefines the implementation of best practices in the risk management and compliance journey for Insurers.
BANKING FRONTIERS TECHNOVITI Awards, May 05, 2022.
Frequently Asked Questions (FAQs)
ERM is an organization’s approach to managing risk. It is the sum total of practices, policies, and framework for how an organization handles a variety of risks its business faces. ERM is important because it helps prevent losses or unexpected negative outcomes.
Regulatory authorities have time and again issued instructions & guidelines to Financial Services entities to set high standards in governance especially for aligning Risk with Business Strategy. The “risk appetite” of a Financial entity is the aggregate of all levels and types of risk it is willing to take in order to achieve its strategic business objectives. A Financial entity’s Risk Appetite Framework is the overall approach to establish, assess and monitor risk appetite. It considers the various risks to the entity as well as to its reputation.
Subsequent to multiple crises, the Financial Services Sector felt the need for an Enterprise Risk Management (ERM) framework. The need of the hour for organisations is to transform their ERM framework to be forward-looking and align Risk Governance with organization’s strategic business goals.
Following are key features of Enterprise Risk Management Solution:
Risk & Control Self-Assessment (including risk aggregation and risk quantification & analytics)
Top Risks & Key Risk Indicators
Incident & Operational Loss Management
Issue & Action Plan Management for tracking actionable status
Risk Appetite
Enterprise Risk Management Reports and Graphical Dashboards
Data Repository
Technical requirements like information security
The sum total of implementing an Enterprise Risk Management (ERM) solution is to maximize an organization’s value. Implementing an ERM system ensures that objectives of an organization pertaining to managing various risks are successfully met. ERM also ensures that the chosen objectives support and align with the organization’s mission and are consistent with its risk appetite.
The ERM process includes five specific elements – strategy/objective setting, risk identification, risk assessment, risk response, and communication/monitoring.
ERM enables forward-looking strategic risk insights to track mitigation plan and effectiveness. It requires setting limits, analysis of data, working on probability of occurrence to get a quantified score viz-a-viz the threshold limits. That is where quantitative key risk indicators (KRIs) come into play. For each top risk, quantitative KRIs are defined to help anticipate when a risk might occur. Risk owners will be able to determine when and how to escalate risks for corrective discussions and actions. KRIs serve as the triggers to support actionable risk monitoring. Thus a robust ERM eventually serves as a tool for taking actions towards mitigation.
The ERM framework developed by IDBI Intech captures the critical building blocks that we have identified from experience of successful and sustainable implementations in the insurance industry. We strongly believe that a comprehensive framework is essential to achieve the desired state of a matured enterprise risk management.
We work closely with customers from the conceptual stage, building the framework to development and deployment of the solution. This approach helps customers accurately understand risk exposure at multiple levels in their organization.
The solution has been widely recognized and acclaimed by BFSI forums. The solution has been awarded at the Banking Frontiers Technoviti Awards in May 2022.
