Financial Risk Services
Deloitte's Risk Advisory practice in Financial Risk provides leading financial institutions with customized solutions covering all aspects of finance and risk management. Our goal is to help our clients achieve their current and future challenges by developing best practice governance, methodologies, processes and infrastructure to measure and manage risks and financial performance.
We work with Chief Risk Officer and members of Executive Management of financial institutions. Our areas of expertise are organized around the following dimensions to offer tailor made services and customized solutions to the challenges presented by the evolving roles, needs, and priorities of these individuals and organizations.
The potential for companies and industries to be disrupted and perhaps even displaced by transformational trends in technology, the global economy, and consumer preferences is on the rise in today’s rapidly evolving, increasingly digitized economy. We assist firms in designing a framework to address strategic risks that are disruptive to financial institution’s value proposition or business model, and which are generally difficult to foresee, measure, and mitigate.
BUSINESS MODEL AND RISK APPETITE
We help our clients in aligning their business model with their risk strategy and design an action plan to ensure the sustainability and viability of their business model. In particular, we support institutions addressing expectations from the Supervisory Review and Evaluation Process (SREP) and go beyond regulatory requirements to develop an insightful risk appetite framework with efficient limit systems that enable sound decision making processes.
PRUDENTIAL AND REGULATORY WATCH SERVICES
In an ever-increasing regulatory environment, regulatory watch activities are key for managing bodies to anticipate their challenges and opportunities and better manage their relationship with supervisory bodies. Deloitte works together with its clients to organize the regulatory watch services and develop strategies, approaches and processes that enable a proactive, forward-looking assessment of regulatory trends and requirements and their impacts on business models.
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CREDIT RISK SERVICES
We support clients in their efforts to assess, design and implement market and credit risk solutions for governance, reporting, model development, data and technology. This range from compliance with regulatory requirements (incl. IFRS9, FRTB, etc.) to enhanced operational processes (incl. management of Non-Performing loans, impact assessment of new products, etc.).
MARKET RISK SERVICES
Deloitte works together with financial institutions to improve their market risk management framework going from the impact on banks’ solvency due to changes in prices affecting the trading book (FRTB) to changes in interest rates in the banking book (IRRBB).
LIQUIDITY RISK AND ASSET-LIABILITY MANAGEMENT (ALM)
Firms liquidity and funding risk management framework, funding strategy, strategy regarding liquidity buffers and collateral management, cost/benefit allocation mechanisms, intraday liquidity risk management, liquidity stress testing and liquidity contingency plans are core elements of a sound risk management framework. Deloitte helps clients enhance their capabilities in this area.
OPERATIONAL RISK SERVICES
We help firms to review their operational risk management (ORM) framework through a review of their process operating effectiveness to manage non financial risks (NFR) and elevate business performance. Developing integrated, strategically-aligned operational risk management solutions allow organizations to make optimized business decisions.
We support banks and investment firms in the implementation of sound, effective and comprehensive ICAAP and ILAAP frameworks comprising a clear assessment of the risks to capital and liquidity, and have well-structured risk governance and risk escalation processes based on a well-thought out and thorough risk strategy which is translated into an effective risk limit system.
Stress testing is a risk management tool used by institutions to measure their capacity to evolve within an economic downturn or assess their appetence to products, sectors or regions. We assist financial institutions in the implementation of a sound stress testing framework, helping them to achieve their goal.
MODEL RISK MANAGEMENT
Models serve many important strategic purposes for financial services firms, and in many jurisdictions are relied upon in the regulatory framework. However, they can pose a number of risks for both financial services firms and the regulators monitoring them. In a policy environment that is broadly supportive of model use, how can firms build supervisory confidence in their models amid increasing regulatory scrutiny?
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RECOVERY AND RESOLUTION PLANNING
Banks are required to draft recovery plans to prepare for possible financial difficulties and restore their viability in a timely manner during periods of financial distress. In contrast to recovery plans, resolution plans comprise a comprehensive description of credible and feasible resolution actions which may be implemented under the Single Resolution Mechanism if a bank meets all the conditions for resolution. We provide assistance in designing and operationalizing the recovery plan of firms subject to this regime.
REGULATORY RISK REPORTING SERVICES
Deloitte assists clients with the establishment of a documented and consistent reporting process for management and regulatory risk reporting. This covers all prudential and statistical reporting requirements for banks (extended COREP, AnaCredit, Statistical reporting to BCL, etc.).