Risks that may occur during business activities of financial institutions are becoming increasingly diverse. Tackling this problem requires flexible risk management and improvements in current methods via monitoring quantitative and qualitative assessments. 

KPMG provides specialized risk management services that identify and quantify risks, related to existing elements of business management, to maximize profit and shareholder values utilizing the firm’s capabilities - resources and internal control capacity. On top of traditionally existing regulation-oriented risks, various complex risks continue to rise up. To hedge these risks, our team of specialists will effectively identify and mitigate the uncertainties in the early stages and provide an optimal proposal for the future growth of clients.

Credit Risk

Credit evaluation model is a crucial element to accurately predict and manage credit level of financial institutions under an uncertain economic environment. 

KPMG’s Credit Risk Model Consulting Services develop new credit evaluation models, which utilize sophisticated and precise statistical methods on par with global standards, to assist with rational decision-making and efficient and consistent review processes. In addition, we offer advisory and comprehensive credit risk model consulting services that are optimized to clients’ portfolios by using strategized construction of data infrastructure and credit evaluation models.

• Credit risk model
  

• Credit Risk Measurement
  

• Credit Risk Management
  

Credit Risk Management Consulting Services support establishment of operational risk and analytical tools such as: cut-off analysis, limit management method, interest calculation system, early warning and crisis analysis system, and delinquency and collection management, to manage credit risk deduced from case studies in successful scenarios.

Market risk

There is an increase in the types of marketable securities and volume of transactions in addition to newly spotlighted alternative investments, and self-financing portfolios. These factors stimulate various efforts to properly manage credit risks of financial institutions. Also, with implementation of IFRS, we expect an increase of interest in accounting treatment and fair value assessments of traditional price-fluctuating securities, stocks and bonds, as well as other various types of alternative investments. 

Additionally, with strengthened capital regulations on trading accounts this results in the re-evaluation of VaR calculation methods and increasing of regulatory capital requirements for liquid securities, credit derivatives and stocks. In response to such changes in economic and regulatory requirements measures need to be taken to reassess the existing market risk management infrastructures.

Operational Risk

Expansion of the services offered by financial institutions enable diversification and enhanced financial products. At the same time,  in the transition to IT systems, systemic or manual failures (embezzlement or human errors) are inevitable. 

Financial institutions need various methods to prevent these potential losses prior to mishaps. To tackle these problems, a variety of preventative measures are used such as the establishment of a process associated with the organization of risk management, the enforcement of Control Self-Assessment, retrieval of data loss and calculation of operational risks. Effective management of operational risks can only be achieved through deep contemplation and planning on potential improvements and repeated inspections of internal control system. 

KPMG possesses Korea’s only specialized operational risk management team with various tools and extensive field experience.