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McKinsey on Risk Volume 2

McKinsey on Risk – Volume 2

This is the second issue of McKinsey on Risk (read the first issue on this link), the journal offering McKinsey’s global perspective and strategic thinking on risk. McKinsey’s focus is on the key risk areas that bear upon the performance of the world’s leading companies—including credit risk, enterprise risk management and risk culture, operational risk […]

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The Global Risks Report 2017

Global Risks Report 2017

The Global Risks Report 2017, from the World Economic Forum (WEF), features perspectives from nearly 750 experts on the perceived impact and likelihood of 30 prevalent global risks as well as 13 underlying trends that could amplify them or alter the interconnections between them over a 10-year timeframe. The WEF summarises that: 2016 saw a crystallization […]

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Risk Scoring Matrix

Residual Risk Scoring Matrix Example

While each firm has its own risks scoring guide, most firms will follow common guidelines, such as suggested by IOSCO on the Risk Identification and Assessment Methodologies for Securities Regulators. This article includes examples of risk scoring matrices used for Impact (inherent or gross risk – described in our section Risk Register), Likelihood (or probability), and the […]

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Risk Heat Map

How to Create a Risk Heatmap in Excel – Part 1

Risk heat maps are commonly used in operational risk management and are specially useful to represent a firm’s risks in a visual manner, highlighting the ones that need to be managed more closely. When assessing operational risk, the risk manager will typically use a spreadsheet to record its firm’s key risks and rate the impact and likelihood (or probability) assessment scores for […]

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An Overview of Operational Risk Management

VIDEO: An Overview of Operational Risk Management

Operational Risk has historically been considered by many as the less-important-“younger brother” of Credit Risk and Market Risk. Operational Risk has been growing in importance within financial services providers, being them top tier 1 banks, brokerage firms, investment management firms, financial boutiques, among others. The fundamental aspect of operational risk is that if a given (operational) risk occurs […]

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