ERM Framework in Finance

A complete framework for Enterprise Risk Management in Finance

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ERM Framework in Finance by Mind Map: ERM Framework in Finance

1. 1 Risk Management Planning

1.1. Framework Establishment

1.1.1. Reach and Scope Definition

1.1.2. Taxonomy

1.1.3. Approach

1.1.4. Policy

1.1.5. Organisation Structure

1.2. Maturity Roadmap

1.2.1. Legacy Risk System Treatment

1.2.2. Short Term Plan

1.2.3. Five Year Goal

1.2.4. Benchmark & Best Practices

1.3. Team Design

1.3.1. Internal Team

1.3.2. Working with vendors

2. 2 Risk IT ~ Data & Systems

2.1. Data Management

2.1.1. Database Relationship Structure

2.1.2. Import and Output Scripts

2.1.3. Data Quality Definition

2.1.4. Integration & Harmonization

2.1.5. External Data and Benchmarks

2.2. Intranet / Cloud

2.2.1. Risk Entry Forms

2.3. Modeling

2.3.1. Model Engine

2.3.2. Distributions & Coherent Risk Measures

2.3.2.1. Loss Data Approach

2.3.2.2. Monte Carlo Simulation

2.3.2.3. Hybrid Approach

2.3.2.4. Time Series Analysis

2.3.3. Causal Modelling

2.3.3.1. Bayesian Networks

2.3.3.2. Principal Component Analysis

2.3.3.3. Partial Least Squares Modelling

2.3.3.4. Recursive Partitioning

2.3.3.5. Structured Equation Modelling

3. 3 Reporting and Decision Making

3.1. Consolidated Risk Report

3.2. Risk Dashboard

3.3. EV Risk Adjusted Return Reports

3.4. Stress Test & Liquidity Report

3.5. Funds Transfer Pricing

4. 6 Risk Response

4.1. Planned Controlled Response

4.2. Netting & Hedging Strategies

4.2.1. Structured Risk Response

4.3. Immunization

4.4. Insurance Coverage

4.5. Business Continuity Planning

5. 7 Specialist Risk Centres

5.1. Credit Risk

5.1.1. Credit Counterparty Risk Assessment

5.1.1.1. Internal Credit Rating

5.1.1.2. Credit Spread Modelling

5.1.1.3. Credit Valuation Adjustment

5.1.1.4. Potential Future Exposure

5.1.1.5. Basel Regulatory Reporting

5.1.1.6. Concentration Risk & Stress Testing

5.1.1.7. Credit Policy Development

5.1.2. Settlement Risk

5.1.3. Issuer Risk

5.2. Market Risk

5.2.1. FRTB

5.2.2. VaR & ES

5.2.3. Stress Testing

5.2.4. Asset Liability Management

5.2.5. Greek & Trading Measures

5.3. IT Cyber Risk

5.3.1. Cobit Framework

5.4. Project Risk

5.4.1. Project Risk Assessment

5.4.2. PM Risk Monitoring

5.5. Strategic Risk

5.6. Reputation Risk

5.7. Operational Risk

5.7.1. 4 Risk Identification

5.7.1.1. Risk Mapping

5.7.1.1.1. Definition Based Process Control

5.7.1.1.2. Value Chain Views

5.7.1.1.3. Tabular Mapping

5.7.1.2. Risk Registration

5.7.1.3. Incident Management

5.7.1.4. Scenario Analysis

5.7.2. 5 Risk Assessment

5.7.2.1. Root Cause Analysis

5.7.2.2. Key Risk Indicators

5.7.2.3. Risk Control Assessment

5.7.3. 6 Risk Response

6. 8 Integration

6.1. Governance

6.1.1. Risk Oversight

6.1.2. Risk Appetite

6.1.3. Risk Stewardship

6.2. Compliance

6.2.1. Risk Based Compliance

6.3. Occupational Health & Safety

6.4. Quality Control

6.5. Regulations

6.5.1. Global Standards

6.5.1.1. ISO Standards

6.5.1.1.1. ISO 31000 Global Risk Standard

6.5.1.1.2. ISO 22301 BCP

6.5.1.1.3. ISO 9001 Quality Assurance

6.5.1.1.4. ISO 55001 Asset Management

6.5.1.1.5. ISO 19600 Compliance Management

6.5.1.1.6. ISO 45001 OHS

6.5.1.1.7. ISO 27001 IT Security

6.5.1.2. COSO

6.5.1.3. Local Standards

6.5.2. Banking Standards

6.5.2.1. Basel II

6.5.2.1.1. Pillar I

6.5.2.1.2. Pillar II

6.5.2.1.3. Pillar III

6.5.2.2. Basel III

6.5.2.2.1. Capital Standard

6.5.2.2.2. Liquidity Coverage

6.5.2.3. Basel IV

6.6. Internal Audit

6.6.1. Risk Based Audit

6.6.2. Continuous Audit

6.6.3. Specialised Audits

6.6.3.1. IT Audits

6.6.3.2. Functional Audits

6.6.4. Financial Audits

6.6.4.1. Risk Adjusted Financial Audits

6.7. Finance

6.7.1. Planning and Budgeting

6.7.2. Capital / Provision Establishment

6.7.3. Report Harmonization

6.7.4. IFRS Standards Integration

6.7.5. Strategy / Due Diligence

6.8. Human Resources

6.8.1. Performance Reviews

6.8.2. Resource Planning

6.8.3. HR Risk Policy Development

7. Taxonomy

7.1. Market Risk

7.1.1. Trading Risk

7.1.1.1. Strategy

7.1.1.2. Execution

7.1.1.3. Model Risk

7.1.2. Basis Risk

7.1.3. Interest Rate Risk

7.1.3.1. Convexity Management

7.1.3.2. Economic / Yield Curve

7.1.4. Equity Risk

7.1.5. Liquidity Risk

7.1.5.1. Crowded Markets

7.1.5.2. Funding Liquidity

7.1.5.3. Maturity Gap Risk

7.1.6. Volatility & Tail Events

7.1.7. Concentration / Idiosyncratic Risk

7.2. Credit Risk

7.2.1. Transaction Approval

7.2.1.1. Settlement Risk

7.2.2. Portfolio Concentration

7.2.2.1. Netting

7.2.2.1.1. Wrong Way Risk

7.2.3. Counterparty Risk

7.2.4. Issuer Risk

7.3. Operational Risk

7.3.1. Malpractice

7.3.2. Fraud

7.3.2.1. Internal

7.3.2.2. External

7.3.3. Disruption

7.3.3.1. IT Disruption

7.3.3.2. Public Infrastructure

7.3.3.3. Non IT Disruption

7.3.4. Security Breaches

7.3.5. OHS Practices

7.3.5.1. Employee Relations

7.3.5.2. Diversity and Discrimination

7.3.5.3. Workplace Safety

7.3.6. Asset Damage

7.3.6.1. Natural Disasters

7.3.6.2. Malicious Acts

7.3.7. Delivery Failure

7.3.7.1. Transaction Capture

7.3.7.2. Monitoring and Reporting

7.3.7.3. Client Intake Documents

7.3.7.4. Account Management

7.3.7.5. Trade Counterparties

7.3.7.6. Vendors and Suppliers