erm | RISK MANAGEMENT AND COMPLIANCE

RISK TYPES ARE LIKE STARS, FAR AND NEAR

Unique Entity with Unique Risk Types

ENTERPRISE RISK MANAGEMENT (ERM)

"Failing to plan for effective risk management is a blatant attempt to deny the existence of risk. The most effective way to deny the existence of risk is to either close an entity or avoid starting one altogether. It is crucial to have the courage to focus not only on risk but also on the potential rewards." - Vincent Santeng

ERM Strategy and Culture

Our ERM process includes defining objectives, identifying risks, assessing impact, implementing responses, and effective communication with monitoring. We identify critical risks for strategic success through tailored solutions. With experience, we offer risk management, compliance training, and consultancy to diverse industries, helping implement integrated risk management solutions with a risk-reward perspective for decision-makers and specialists.

ERM is Beyond Maths

ERM includes complex risk models rooted in mathematics, yet driven by principles from economics, financial and portfolio management. Ensuring comprehension by stakeholders with diverse interests is vital, as their perspectives may differ from risk experts.

Main Classified Risk Types

Risk is inherent in every business event, and management must identify, analyse, evaluate, and respond to risks to meet stakeholder expectations. Each organisation faces unique risks in terms of type, magnitude, and impact. While Basel Accord provides general guidance, regulators use internal risk models recognising each organisation's uniqueness. Various risk types and sources exist, with Basel Accord focusing on credit, market, operational, and liquidity risks.

Credit Risk

The possibility of default is not a fictional concept. Credit risk can be likened to taking a chance on a cliff, hoping to find a secure landing spot. We provide tools to help organisations manage it effectively.

Market Risk

The majority of financial instruments are influenced by market forces, including speculations that often lead to volatility. To handle the impacts of market events, an effective strategy is required.

Operational Risk

Every process and event carries inherent risks that can result in outcomes different from what was anticipated. Operational risk can be incidental or deliberate, depending on the type of loss involved.

Liquidity Risk

Liquidity risk arises from the net exposure and the demand for short-term payments and receipts. It occurs when an entity is unable to fulfill its obligations within the required timeframe.

The Cycle of Risk Management

The risk management process involves risk identification, assessing severity and priority, implementing risk responses, and portfolio development. At RMCT, we consider culture, strategy, performance targets, compliance, organisational structure, governance, sustainability, technology, and government policies in our training and implementation approach. Planning for risk mitigation is a key component of our methodology.

Strategic and Plan

The risk management cycle starts with assigning ownership and establishing risk appetite at the executive level, forming an essential part of strategic decision-making and responsibilities.

Environment and Goodwill

Performance involves establishing a method to determine the types of risks, their probability of occurrence, and the potential impact they could have on the organisation if not effectively managed.

Operations and Compliance

Regulators bear the responsibility of safeguarding the public, while the management team of an entity must ensure the protection and fulfillment of the interests of all stakeholders.

Stakeholders and Returns

Throughout various stages of the operational process, an entity is obligated to provide stakeholders with reports regarding event performance and levels of exposure.