Risk culture assessment becomes standard procedure in banks, survey conducted by RMA and Ncontracts

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Brentwood, TN and Philadelphia, PA, June 07, 2022 (GLOBE NEWSWIRE) — A survey by The Risk Management Association and Ncontracts found that more and more financial institutions regularly assess their risk culture – messages, policies, the behaviors and other factors that determine how closely an organization’s decisions align with its stated strategy, risk appetite, and principles. But, the survey notes, the shift to remote and hybrid working has caused changes in operating environments and culture, which have prompted institutions to revise risk management incentive programs – and could change the culture. risk in the future.

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“We are in a time of risk, with pandemics, geopolitics, cyber warfare and technological advancements creating a multitude of challenges for organizations,” said Nancy Foster, President and CEO of RMA. “Creating and sustaining an appropriate risk culture provides employees with the strong foundation they need to take and manage risk in a way that aligns with their organization’s strategy and values.”

The survey of 57 community, regional, super-regional, money center and investment banks headquartered in the United States and Canada shows that the number of respondents rating risk culture is steadily increasing: so half of respondents regularly assess their risk culture five years ago, all do so today. The investigation also revealed that:

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  • Two-thirds of respondents assess their risk culture every year: 10% assess more frequently, 10% assess less frequently, while the rest of respondents specify other cadences.
  • Data used to assess risk culture includes overall loss and risk rating trends, industry concentration assessments, employee surveys and listening sessions, speed of identification risk and other risk awareness measures.
  • The approach to encouraging positive risk culture activities is tied to asset size. Two-thirds of respondents with less than $10 billion in assets do not have an incentive program specifically for risk management, while 72% of those with more than $60 billion agreed that “any employee at any level is recognized or encouraged to participate in risk management”.
  • Organizations with the most mature approaches to culture and conduct use a consistent methodology to assess BSA/AML, Info Sec, identity theft, and other programs, and leverage the assessments for business decisions and goals strategic.

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“COVID-19 and the war in Ukraine are examples of how risks change rapidly,” said Rafael DeLeon, senior vice president of industry engagement at Ncontracts. “To keep pace, banks are not only investing heavily in risk management capabilities, but also assessing whether their risk cultures are effectively communicated by leaders, reinforced through training, and encouraged through incentives.”

Read the survey summary here.

About the Risk Management Association (RMA)
Founded in 1914, the Risk Management Association is a member-driven, not-for-profit trade association whose sole purpose is to promote the use of sound risk management principles in the financial services industry. RMA promotes an enterprise approach to risk management that focuses on credit risk, market risk and operational risk. Based in Philadelphia, Pennsylvania, RMA has 1,600 institutional members, including banks of all sizes as well as non-bank financial institutions. They are represented within the Association by 31,000 people spread across North America, Europe, Australia and Asia/Pacific.

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The RMA brings financial institutions together through a series of consortia, councils, committees and task forces on key issues. This includes the RMA Climate Risk Consortia and the RMA Model Validation Consortium (MVC). Members of the MVC Advisory Board include Ally Bank, Forbright Bank, MUFG Bank, PNC Financial Services, US Bank and Zions Bancorporation.

About Ncontracts:
Ncontracts provides comprehensive vendor compliance, compliance, risk management and loan compliance solutions to a rapidly growing customer base of over 4,000 financial institutions in the United States. We help financial institutions achieve their compliance and risk management goals with a powerful combination of easy-to-use cloud-based software and expert services. Our suite of solutions encompasses the full risk lifecycle, including vendor management, enterprise risk management, business continuity, compliance, audit and results management, and cybersecurity. The company was named one of Inc.’s 5000 fastest-growing private companies in America for the third year in a row. For more information, visit www.ncontracts.com or follow the company on LinkedIn and Twitter.



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