Globalisation, digitisation, demographics. Thanks to the continued pressure from regulators at all operational levels within banks, we see a changing perspective in the market, operating models and customer relations. In order to survive in this post-crisis environment, the way in which banks create value with sustainable* risk outcomes warrants particular attention. Our Financial Risk Management team provides advice to risk functions of banks in various ways. With our hands-on mentality, we create structure and provide specialist knowledge in complex implementation projects, which are generally controlled by regulations. Moreover, via our international network we offer usable insights to achieve a flexible, sustainable and cost-efficient risk function. A few examples of how we support our customers in the area of financial risk management:
Sustainability
The expected impact of the implementation of the Paris accord and the EC Sustainable Finance Action Plan on risk management will be substantial. Besides integrating the Evironmental, Social & Governance (ESG) risk, policy the and the processes within the risk management function, this will also have a major influence in terms of customer and bank strategy. Given the complexity involved, thorough action and urgency are called for.
Regulations and transformation
Implementing legislation and regulations remains a huge burden on the organisation. The complexity and costs have increased massively. At the same time, banks need to start organising their Risk Management activities more efficiently and effectively. This means investing in data-driven and digital processes. How can these project reinforce each other such that compliance with regulations yields business benefits?
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Services
Risk-modelling
Risk management today is inconceivable without the use of reliable quantitative risk models. Hoever, improving and maintaining the quality of such models and updating them so that they continue to meet statutory requirements can be a significant challenge. This starts with a robust model risk framework and a model risk lifecycle that is automated as far as possible. In order to limit the costs and efforts required for an advanced model environment, standardisation, automation and outsourcing of model development and validation activities are becoming ever more important for banks. Moreover, modellers are constantly being challenged to integrate new types of risks, such as climate risk, into their models. KPMG can help you in this regard.
Asset & Liability Management
Managing a 500+ page ALCO report, the consideration of whether to replace it with modern BI software, assessing the statistics about liquidity and interest risk and the performance of behavioural models during these unprecedented times of low interest rates and a global pandemic… Finding a balance between the normative and economic limits and objectives, controlled by regulations and about which the executive board needs to be advised... Implementing new reporting platforms in cloud environments and trying to connect the risk and financial insights together, while transitioning from a monthly to a daily process... Welcome to the world of Treasury and Balance Sheet Management, a world in which KPMG is at home and is pleased to assist you.
Prudential regulation
Nearly a decade after the outbreak of the global financial crisis, prudential regulation remains a very topical subject. The pressure on banks is undiminished as a result of the large volume of new rules, which is coupled with frequent interrogations and on-sides in order to verify complete and timely implementation. After all, non-compliance has significant consequences: loss of trust in financial institutions, loss of customers, financial damage and regulatory measures. KPMG offers you help and support to comply with the regulations.
Transformation of the risk function
The necessity of achieving sustainable growth is a strategic priority for C-level executives at banks all over the world. In order to survive and thrive in a post-crisis environment, focusing on the way in which the company creates value and handles these risks in the long term is essential. In view of the central role of the CRO function in this process, leading CROs have already embraced the necessity of a transformation of this kind. KPG can help you to achieve a flexible, sustainable and cost-efficient risk function that is ready for the coming decades.
