Three strategic risk management scenarios offer three paths toward the same goal.
Risk management professionals and compliance leaders know all too well that “perfect” doesn’t exist when it comes to strategic risk management. But what does an effective program look like?
Ideally, both first and second lines are on the same page in terms of strategic risk management – simpatico. The first line knows where the organization’s risks lie, who’s managing risk, and who to talk to when a problem comes up. The second-line risk and compliance team doesn’t spend too much time managing risk; instead, they provide oversight while helping the first line understand and manage risk.
With this highly proactive approach to risk management, the first line can react fast and execute bold business strategies knowing they’ve got a qualified and prepared second-line team ready to triage and mitigate risk right away.
For most banking risk leaders, the reality of their risk management and organizational strategy probably looks less like the ideal and more like one of the following three scenarios. Read on and see which story resembles your experiences, past or present.