Risk Advisory for Financial Institutions
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Transcript of Risk Advisory for Financial Institutions
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8/14/2019 Risk Advisory for Financial Institutions
1/12Risk Advisory Services for Financial Institutions 1
Risk Advisory Services
for Financial Institutions
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2
Intro
ducti
oGood risk management doesnt slow anorganization down it helps it go faster.
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Risk Advisory Services for Financial Institutions 3
The Ernst & Young Financial Services Risk team is built
on competency by addressing clients strategic and
operational challenges, which are relevant to todays
environment.
Strengthen your lines of defense and turn risks into
opportunities
The Ernst & Young Financial Services Risk team assist
its clients in all areas of the three-lines of defense model:
Internal Audit
Internal Controls
Governance, Risk & Compliance
Regulatory Services
Our team of professionals combine:
Sector-driven subject matter specialists in banking &
capital markets, asset management and insurance
Depth of knowledge and experience that comes
from working for and with diverse and leading
organizations
Extensive understanding of local culture, values and
languages
Regulatory pressure continues to increase for nancial institutions.
In this business environment, executive management and board members
want a deeper understanding of their key business risks, how these risks are
being managed in their businesses and, in particular, how to manage risk to
create the greatest return for their shareholders.
Ernst & Young won Hong Kong Most Admired
Knowledge Enterprise (MAKE) Award (2010)
Say they are still in
the process of shifting
the culture
Noshift
Makingprogress
Signicantlyshifting
23%
73%
4%
If you are going to have a risk culture throughout the
company, you need the heads of the lines of business
to walk the walk and talk the talk.
Source : 2010 The Institute of International Finance (IIF) Report
Ernst & Young is one of the most globally integrated
organizations in professional services. Our mindset,
actions and structure are unique in our profession.
We are globally connected and locally engaged. Our
global approach and our ability to provide a consistent
and harmonized service everywhere help us to make a
difference by helping our clients achieve their potential.
Risk Owner
Management Board
Risk BusinessUnits
RiskTaker
(independent)Risk Controlling
Functions
RiskController
InternalAudit
IndependentAssurance
!
Present in all lines of the Three-Lines of Defense Model
Firms are on a journey to instill awareness and ownership of risk
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4
In
tern
ala
udit Companies value the roleInternal Audit plays. Executives
want Internal Audit to not onlysee what has gone before,
but also what comes next.They want Internal Audit toprovide insights into strategicinitiatives, and to shareideas that improve businessperformance. And they want itnow.
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Our Ernst & Young internal audit service delivery
platform underlies a common language and framework
comprised of three independent sets of activities: Assess,
Improve, and Monitor (AIM), that we will align to yourbusiness needs to address your evolving risk prole.
Our services include:
Internal audit outsourcing & co-sourcing
Internal audit risk assessment
Internal audit quality assessment
Functional performance assessment
Internal audit transformation
Training
Ernst & Young has provided internal audit services for over 25 years,
and our goal is to help clients create leading internal audit functions. We
accomplish this goal by sharing innovative and effective industry leading
practices and processes with our clients. We have invested USD150 million
in creating proven internal audit methodologies and technologies.
One of my clients is a large European insurance
group developing exponentially in Asia. We helped
them to tailor their internal audit program, by
applying Group-wide standards, to the risks faced
locally and delivered efciently in a co-sourcing
arrangement.
As a former head of an internal audit department
for a large insurer, I know how difcult it can
be to execute the audit plan. Adding value to
internal audit through practical and pertinent
recommendations is paramount. I apply the Ernst
& Young methodology and tailor it precisely to my
clients business products and systems.
FlorenceSenior Manager
Advisory Risk Greater China
Risk Advisory Services for Financial Institutions 5
Ernst & Young has internal audit relationships
with more Fortune 500 companies than anyother Big Four Organization.
Source: 2012 Fortune 500 Market Share Ernst & YoungSurvey.
We went to Ernst & Young because of their clear
leadership in internal audit - coupled with the fact
that this was an important decision for us. It wasa bit like the 80s when you went to IBM for your
computer and Xerox for your photocopier.
Global Audit Director, UK listed bank
Internal audit
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Inte
rnalcont
rol 82% of global institutional investors
will pay a premium for companiesthat demonstrate successful riskmanagement1
61% will not invest where there is
evidence of poor risk management2
79% of organizations with mature
risk management systemsare either moderately or verysuccessful at protecting and
enhancing shareholder value
3
1 & 2Investors on risk,Ernst & Young,2006
3Global EnterpriseRisk ManagementSurvey, AON,2010
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A greater understanding of risks and controls can result
in enhanced delivery of cost-reduction activities. Rating
agencies are also increasingly interested in companies
risk management.
By combining our knowledge and experience of risks and controls, we
can help your company enhance your process control efciency and
effectiveness.
Risk Advisory Services for Financial Institutions 7
What can be a better reference than one that
comes from within a clients own organization?
We worked with the compliance team of a very
large multi-national nancial institution helping
them review their internal controls over certain
processes. They were so impressed with the
quality of the work we delivered and with our
people who performed above the normal call of
duty, that they continue to call us and refer our
team to other departments in their company
whenever they need assistance not only for area
of internal controls but also other business needs
where our team and Ernst & Young are able to
assist.
Aris
Manager
Advisory Risk Greater China
Our services include:
Risks and controls assessment
Evaluation of operating effectiveness Internal controls assessment and evaluation relative
to strategic, compliance, operational and / or nancial
risks
Formulation of appropriate actions / remediation plans
Design of improvements to processes and controls
SOX 404 assessment, testing and monitoring
Pre-IPO internal controls advisory
ISAE 3402/ SSAE 16
Ernst & Young ranked 1st in the
Operational Risk & Regulation
Consultancy Ranking in 2010 & 2011.
Source: The Operational Risk & Regulation consultancy rankingsare based on a poll of OR&R readers conducted in December 2011.
Internal controls
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Governance
,Ri
sk&
Com
plia
nceAn average company spends 4%of revenue on risk management
activities.The Ernst & Young approach to GRCensures that organizations not onlyleverage their risk spend and reducetheir risk of failure, but that theystrike a balance between achievingcompliance and contribute toprotecting and enhancing businessperformance.
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Risk Advisory Services for Financial Institutions 9
Nearly 70% of organizations are highly reliant on their
Governance / Risk & Compliance (GRC) activities as
a safeguard against failure. However, two-thirds of
companies think this spending and dependency is notmatched by the value that business leaders think they
currently get from their GRC functions. Therefore, there
is a clear need for getting greater value from what
is spent.
We offer a holistic and integrated approach to managing
risk that drives improved business performance. We help
traditionally siloed or disparate risk practices to be
aligned and integrated to achieve greater efciency and
value across the risk value chain. We also help executive
management and board members to manage risk to
create the greatest return for their shareholders.
Our services include:
Enterprise risk assessment
Risk & control framework assessment
Enterprise risk management and governance (ERM)
Operational risk advisory services
96% of Financial Services institutions reported an increased focus on
risk appetite but only 25% reported a link to business decisions. This is
clearly a challenging area.
Our client was required by the regulator to
address accuracy and completeness issues in
their risk catalogue and related internal controlsdocumentation. We were able to mobilize a
bilingual English / Putonghua team of subject
matter specialists to provide high quality
deliverables to be accepted immediately by the
regulator. It was a very enriching experience, I
felt I was able to add a lot of value to my client.
Eric
Senior Manager
Advisory Risk Greater China
Ernst & Young ranked 1st in the areas of Corporate
Governance, Enterprise-Wide Compliance & Risk
Management Strategy & Regulations Strategy.
Source: The Operational Risk & Regulation consultancy rankings are based ona poll of OR&R readers conducted in December 2011.
Governance, Risk & Compliance
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Reg
ulat
oryS
ervic
e Regulation and compliance risks are oneof the most serious challenges perceivedyesterday, today and tomorrow.
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Risk Advisory Services for Financial Institutions 11
Our work on regulatory and compliance, include the issues on
Anti-money Laundering, FATCA, Solvency II, Basel II & III and Regulatory
Licensing.
With the many updates in anti-money launderingand counter-terrorist nancing regulations,
I have been leading many engagements in
this eld. With my, and my teams wealth of
experience, I can, not only help my clients to
be compliant, but also provide value-added
market insights on the current practices amongst
nancial organizations. My clients really value
this.
Vincent
Manager
Advisory Risk Greater China
One of the myths around FATCA is the Asian
nancial institutions are not impacted by
this American tax legislation. We carried out
an impact assessment for a life insurer with
extended operations in Asia. It was fascinating
delving into the operations and identify impacts
which were unexpected.
SamSenior Manager
Advisory Risk Greater China
Regulatory aspects play an important role when
establishing asset management structure and
also in its on-going operations. More onerous
regulations are forcing asset managers to invest
more time and money in compliance and related
activities. Effectively navigating the increasingly
sophisticated regulatory environment willbe a key challenge and could be a source of
competitive advantage for asset managers over
the next several years. Our aim is to deliver
regulatory and compliance services helping
asset managers to meet the relevant regulatory
requirements while being exible enough to
accommodate future regulatory developments.
Ying
Senior Manager
Advisory Risk Greater China
Regulatory Services
We assist nancial institutions in the development and
implementation of practical solutions to regulatorydirectives and evolving regulatory expectations regarding
compliance, risk management, and internal control
issues. Our team includes professionals with signicant
regulatory and industry experience.
Anti-money Laundering
We assist nancial services organizations in identifying
money laundering risk, reviewing controls over
suspicious activity, assessment of compliance with
regulations and leveraging technology. Our approach
also helps clients to carefully consider important trade-
offs for additional investments in AML programs and
technology solutions.
Our services include:
AML risk assessment
Independent controls testing
Building or enhancing existing programs
Benchmarking to local regulatory requirement and /
or current market practices
Evaluating and implementing software tools and
techniques
Responses to regulatory or supervisory mandates
FATCA
Technical seminars
Impact assessment
Implementation support
SFC Licensing
Hong Kong SFC Licensing
Bank licensing Compliance operations and regulatory advice
Compliance due diligence / internal control reviews
Training
Ernst & Young ranked 1st in the
areas of Anti-Money Laundering,
Basel II/III, Fraud/Financial
Crime Prevention &
Treating Customers Fairly.Source: The Operational Risk & Regulation consultancy
rankings are based on a poll of OR&R readers conducted inDecember 2011.
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Ernst & Young
Assurance | Tax | Transactions | Advisory
About Ernst & Young
Ernst & Young is a global leader in assurance, tax,
transaction and advisory services. Worldwide, our
152,000 people are united by our shared values and
an unwavering commitment to quality. We make adifference by helping our people, our clients and our
wider communities achieve their potential.
Ernst & Young refers to the global organization of
member firms of Ernst & Young Global Limited,
each of which is a separate legal entity. Ernst &
Young Global Limited, a UK company limited by
guarantee, does not provide services to clients. For
more information about our organization, please visit
www.ey.com.
2012 Ernst & Young, China.
All Rights Reserved.
FEA no. 03001984
This publication contains information in summary form and is thereforeintended for general guidance only. It is not intended to be a substitute
for detailed research or the exercise of professional judgment. Neither
the Ernst & Young China practice nor any other member of the global
Ernst & Young organization can accept any responsibility for loss
occasioned to any person acting or refraining from action as a result
of any material in this publication. On any specific matter, reference
should be made to the appropriate advisor.
www.ey.com/china
ED None.
Ernst & Young won the Hewitt Best Employer in China (2009), being the
only professional services organization named in the Top 10 list. This
award is an accomplishment that validates Ernst & Youngs stated goal
of being the Employer of Choice in China, by providing a world-class
working environment for its people, supported by learning, recruitment
and retention policies.
Ernst & Young is present in 20 cities in China and employ more than
10,000 people. We also have access to 152,000 professionals around
the world.
Our risk team is present in Hong Kong, Beijing and Shanghai.
Contact us
Philip Rodd
Partner
Greater China Risk Leader
+852 2846 9028
Florence CarrSenior Manager
+852 2629 3191
Eric Leung
Senior Manager
+852 2629 3886
Samuel Tran
Senior Manager
+852 2846 9721
Ying W Wang
Senior Manager
+86 10 5815 3520
Please visit: www.ey.com/china
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