Enhancement of business wide risk assessment for a private bank
Our client, the UK branch of an EEA private bank, had already established a Business Wide Risk Assessment (BWRA) covering key Financial Crime Risks they were subject to. These were AML, CTF, ABC and avoidance of Tax Evasion.
As part of enhancing their awareness of and controls over a broader set of risks the firm needed to expand the BWRA to include areas that were not currently addressed. These were Market Abuse (Including Insider Dealing), Fraud and Cyber security. Whilst the Firm were confident that they had controls in place they wanted to ensure that they had considered these areas ‘from the ground up’ and that they addressed any gaps they found. The Firm asked Pathlight to support them in this further enhancement of BWRA.
Our subject matter teams worked closely with the Firm to develop the missing elements of the BWRA using a workshop driven approach allowing for the development of a BWRA that was reflective of the business risks and needs.
We started by reviewing any existing risk assessments and Risk and Control Self Assessments (RCSA) that the business had in place in order to utilise existing collateral that was relevant to the Firm. We then prepared framework questions based on our experience and good practice guidance which prompted discussion of inherent risks, mitigations and residual risks in relation to each content areas.
We then facilitated a series of workshops with key business stakeholders to discuss and review the Firms responses to the questions, to build out the BWRA and to finalise the Inherent Risk / Residual Risk ratings.
The Firm was able to develop a BWRA that covered the additional risk areas faced by the business. The Firm now has a robust understanding of the risks they face and knowledge of any gaps and areas requiring mitigation. The workshop approach allowed all key stakeholders to participate in the journey, input their business knowledge and raise their awareness of risks in general.
Given the multiple risk elements within each of the three areas of focus it was important to focus both on the ‘now’ and also the Firms future plans so as to ensure the BWRA was a sustainable model that can be applied in the future.
