Non-Financial Risk Management: Emerging stronger after Covid-19
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Introduction to Part II: Governance of non-financial risk management
Foreword
Preface
Introduction
Introduction to Part I: The origins of non-financial risk management
The complete history of operational risk regulation (abridged)
Financial institutions and non-financial risk: Learning from the corporate approach
The painful financial side of NFR
“Risk management is about managing risk” and “It’s all about people”: Psychology might be more important than models
The confusion of Babel: What’s in the name NFR – taxonomy
Introduction to Part II: Governance of non-financial risk management
“It’s the culture, stupid”: Risk culture as the key building block of NFR management – and why some banks have come through the Covid-19 pandemic better than others
Do you know who is who? Three lines of defence in the context of NFR
Herding cats? NFR divisions as truly diverse units
“Just do it!”: Partially self-organising governance structures for NFR frameworks
Introduction to Part III: Tools and instruments for non-financial risk management
A risk by any other name: Identification, classification and agendas
Old but gold? Mastering the RCSA despite Covid-19
Biases in scenario analyses and how to mitigate them
When scenarios are not severe enough: Stress testing for non-financial risk
Ending NFR in NFR: From Excel sheets to professional IT systems for NFR management
Breaking up with risk management: Using the power of controls for good not the prevention of evil
Introduction to Part IV: Focus areas of non-financial risk management
It won’t be over after Covid-19: Pandemics and operational resilience
Dealing with IT complexity and innovation: Delivering business resilience and customer outcomes
Protecting the new gold: Information security
Conduct risk and the impact of Covid-19
From lawsuits to models: Compliance risk and financial crime
Others are doing it cheaper: But can they really? Opportunities and risks in outsourcing
Managing reputation and stakeholders
Introduction to Part V: The future of non-financial risk management
ESG risk as a new (and very important) trigger for NFR
Looking into the crystal ball: What will NFR management look like in 2030?
This time will be different: An alternative future of NFR management
Right time, right place: The drive for change in operational and non-financial risk
As the focus of financial risk quite often is on its modelling (and implementing often fully or semi-automated risk mitigation techniques based on the results), risk governance didn’t play a huge role in the past. This is different for non-financial risk, which has greatly changed – and is still changing – since the inception of professional operational risk management in the late 1990s and the addition of numerous departments for dealing with specific topics such as compliance or fraud. This introduced a lot of complexity as not only must the roles of the first and second line of defence be clearly defined, but also the interplay between the various second line of defence functions (and any steps in between, sometimes labelled as 1b and 2a). The broad range of topics to be dealt with under the umbrella of non-financial risk has also led to significant changes in the job profiles needed in risk management-related areas, including for the chief risk officer.
Furthermore, the global financial crisis led to a focus on conduct – and the necessity of having a suitable risk culture. Hence, psychological issues again play a major role in the framework for managing non-financial risk
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