Banking Industry Offerings

Risk Control Management System

The impact of regulatory initiatives increases the pressure on financial institutions all over the world to reduce their operational risk and to control it effectively. As many banks have significant operations beyond their domestic markets by acquiring customers abroad, they are geared to comply with international standards as well. Banks are constantly driven to develop more sophisticated tools for assessing, monitoring and managing risks.Risk control takes that information gained during risk assessments and develops and applies changes to control the risks. Risk control can involve the implementation of new polices and standards, physical changes and procedural changes that can reduce or eliminate certain risks within the business. Risk control is an important action taken by firms that is intended to proactively identify, manage and reduce or eliminate risks.Credit-Monitoring-System-icon


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Business Challenges

Risk Control Management requires a sound understanding of the bank's operational environment, the risks to which it is exposed to and the techniques available to measure and manage these. Risk control management is also affected by the infrastructure put in place to implement the chosen risk management framework. There are many different elements to this infrastructure, including organization, management, procedures and controls, all of which have an impact on the effectiveness of the implemented framework. One of the key factors is the effectiveness of the risk control management system, whether an integrated treasury and risk management systems or a specialist risk engine.

Some of the key decisions and policies that needs to be formalized for the risk control management purposes includes

  • To what extent the losses needs to be avoided and to what extend is risk of loss a necessary part of the banking activity.
  • Formalization of standard procedures for measuring risks and risk exposures
  • The extent of decentralization for underwriting the loans and the incentives structure to align individual goals with the banks overall goals
  • Capital allocation across various types exposures and whether there is excessive exposure towards particular risk
  • Calculation of consolidated risk for asset types and allocation of appropriate capital
  • Various risk mitigation techniques to reduce the risk.

What We Offer

  • Banks implement various policies and many procedures are in place to manage and control risk.
  • Credit limits are established for business and government loans for the purposes of portfolio diversification and managing concentration. These include limits for individual borrowers, groups of related borrowers, industry sectors, country and geographic regions, and products or portfolios.
  • Direct loan sales, credit derivative hedges, or structured transactions are used to reduce concentrations.
  • The Risk Control Management system compares the business rules as per Bank's policy and actual risk data and highlights the deviations.
  • It does all the functions like portfolio management, exposure management, policy and process management and credit audit.
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Benefits of Risk Control Management System

  • Risk Control Management System helps to oversee the credit quality in accordance with Bank's policies and limits
  • There is elimination of unnecessary risks by efficient risk control management system
  • Reduction of losses
  • Risk control management is ensured through:
  • Adequate systems and standards for measuring risk
  • Standards for valuing positions
  • Appropriate limits on risk taking and limits on gross and individual positions
  • A comprehensive interest rate risk reporting and interest rate risk management review process
  • Effective internal controls and screening of new products for risk potential

    Testimonials

    Clients

    Nesbitt Burns Inc, Toronto, Canada

    Providian Financials, US

    Citibank, US

    Contact Us

    Email:
    banking@kumaran.com

    Phone:
    1-800-kumaran