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In the wake of the recent Archegos Capital Management fines, totaling $387 million, the financial industry finds itself at a crucial crossroads, grappling with the need for a transformative shift in risk culture. At KRM22, we recognize that addressing this challenge requires a multi-faceted approach; One that blends advanced technology with a reimagined ethos of risk management.
Our Risk Cockpit product is designed to help with the three key challenges facing financial institutions as they approach this crossroads:
1. Instilling a culture that not only respects the balance between risk and reward, but also thrives on it to further generate alpha.
2. Evaluating and addressing potential risks
3. Developing mitigation strategies and governance frameworks.
1. RACI Controls for Accountability: The Risk Cockpit introduces an automated task checklist embedded with RACI (Responsible, Accountable, Consulted, Informed) roles. This feature empowers teams to clearly understand their responsibilities in mitigating risks, aligning individual accountabilities with the collective goal of risk resilience.
2. Engaging the First Line of Defense: Our solution bridges the gap between different lines of defense. By equipping the first line with tools to monitor and manage risks, a sense of shared responsibility and vigilance permeates the institution's culture.
3. Setting Clear Risk Appetite: The Risk Cockpit facilitates setting risk appetite against specific risks. Institutions can proactively identify the risks inherent in their exposures and align their activities accordingly, ensuring that risk-taking is in line with organizational goals.
1. Data-Driven Risk Identification: The system employs a data-driven approach to identify risks necessitating mitigation. It tracks trends in incidents and Key Risk Indicators (KRIs), clearly indicating when thresholds are breached, thereby prompting timely corrective action.
2. Real-Time Reporting and Escalation: Our solution empowers institutions with real-time reporting, enabling senior management to have a comprehensive view of risks. Heatmap dashboards and trend analysis facilitate prompt escalations and decision-making.
1. Initiative Management: The solution allows institutions to chart and execute effective risk mitigation strategies. It provides a structured approach to clearly define initiatives that enhance control, thus ensuring prudent risk reduction steps are taken.
2. Comprehensive Governance Frameworks: By integrating best-practice risk frameworks, the Risk Cockpit enables organizations to scrutinize risks across the hierarchy. This holistic approach ensures that risks are discussed, evaluated, and managed effectively.
As the financial industry grapples with the aftermath of the Archegos incident, KRM22 is committed to help forge a new path forward. The Risk Cockpit is not just a software product; it's a transformative tool that is helping reshape risk culture. By aligning technology with the principles of accountability, transparency, and timely action, we believe financial institutions can overcome challenges, foster resilience, and ensure a brighter, more secure future for the industry.
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