CFO2210. Dynamic Risk and Finance Integration

By integrating the Risk and Finance information, a firm can understand and derive its current and future financial health more comprehensively.

The risks to a firm are many - financial, operational, reputational, regulatory, and business. Some are easier to quantify than others. The ones that are difficult to quantify are typically addressed with qualitative analysis, adjustments, and overlays.

Financial entities are heavily and increasingly invested in this integrated approach, especially since the 2008 Global Financial Crisis (GFC). Among other things, the GFC exposed the absence of this integration. Since many of these entities were considered globally & systemically risky, many regulations such as BCBS-239, IFRS 17-11, CCAR, ICAAP, etc. were enacted to avert this in the future. Ultimately the goal of these regulations, which continue to evolve, is to force financial institutions to take a more integrated view of risk. Although there were many skeptics, today there is general consensus that these regulations have made financial institutions significantly more sound.

Non-financial firms will benefit from the same approach as well, albeit fine-tuned and adjusted for their individual business environment and operating model.

Learning Objectives:

• Evaluate the importance and criticality of having a comprehensive and consistent view of risk and finance and why it matters
• Determine the key considerations in developing such a framework, the technological considerations (cloud, big data, open source, ML/ AL, etc.), and how you should approach it.
• Assess lessons learned from some organizations that have been at the forefront of this digital transformation