SIRA: clear insight into integrity risks | Regulatory Risk | Deloitte


SIRA: clear insight into integrity risks

Risk Powers Performance

Having a strong and effective SIRA (Systematic Integrity Risk Analyisis) is an explicit focus area of the Dutch regulator ‘De Nederlandsche Bank’ (DNB). Effective application of Deloitte’s SIRA approach enables you to not only manage integrity risks, but it also leads to a sustainable competitive advantage.

SIRA, an explicit focus of DNB

Having a strong and effective ‘Systematic Integrity Risk Analysis’ (SIRA) is an explicit focus area of the Dutch regulator ‘De Nederlandsche Bank’ (DNB). In recent years the DNB has noted that financial institutions inadequately translate SIRA into practice. Despite using the DNB’s good practices, financial institutions fail to fully utilize SIRA as a method to control integrity risks. According to DNB, SIRA is often used as a static document instead of a dynamical process for the actual identification and control of integrity risks. There are clear opportunities and room for improvement in the utilization of SIRA.

SIRA: clear insight into your integrity risks

Product Integrity Risk

DNB also finds that product related integrity risks do not receive sufficient attention in the SIRA and in the product development process. Utilize SIRA for a product risk assessment means assessing if products are vulnerable to financial crime and abuse. DNB sees high-value transactions, complex valuations, anonymity, use of new technologies and outsourcing of processes as relevant risk factors. DNB research shows that high-risk products are typically not explained within a SIRA.

“Financial institutions should apply SIRA more as a dynamic instrument, thereby allowing it to actually play a role in the identification and management of integrity risks relevant for financial institutions and their activities (DNB)”

What do we see in the market?

Over the last five years, Deloitte has been involved in several SIRA engagements for both small and large (multinational) financial institutions. As market leader Deloitte is often in dialogue with the regulator and key market players about developments, improvements and opportunities with respect to SIRA. Here are (in short) some of the trends we see in the market:

  • We see improved insight in a broader range of integrity risks for institutions;
  • There has been improvement in the availability of correct, consistent, timely and/or real time relevant data. Data quality still remains a key priority;
  • Institutions execute local SIRAs in the geography where they operate, which allows them to gain insight also into integrity risks for each of their (foreign) business units;
  • Many institutions perform a SIRA from customer perspective, without assessing the product related integrity risks;
  • SIRA could be more utilized for strategic decisions, (long term) value creation and for a risk-based approach for other processes such as monitoring and control testing.

What can Deloitte do for you?

Deloitte can provide support and guidance in conducting an effective SIRA or provide you with our objective opinion on your current SIRA by comparing it with our leading practice and field experience. Deloitte has a team of experienced regulatory professionals that are ready to provide clients with tailor-made advice on any SIRA-related topics.

More information?

For more information about the SIRA approach? Please contact Christiaan Visser or Joes van Berkel via their contact details below.

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