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Credit Risk 1 big thing: Make timely recommendations regarding changes in credit classification and risk rating

July 2022 by The Art of Service

The big picture: Support management of the credit risk appetite framework, including calibration of portfolio appetite limits linked to business strategy and entity capital/earnings and for compliance with various complex regulatory requirements.

Why it matters: Implement an effective portfolio risk management process that invest in identifying, managing, monitoring, and reducing risks in the portfolio assets, including development of project specific Credit Monitoring Plans.

The backdrop: Manage a team of leaders responsible for building and maintaining governance processes across all of Consumer Credit Risk and Policy Management including lending authority, exception reviews and other governance related activities.

On the flip side: Make sure your process supports Credit Risk Management team in preparing reports and documentation for regulatory reviews and audit activities.

How it works: Perform your organization needs in depth market and credit risk analysis to support organizations Risk Management and regulatory demands.

State of play: Identify and recommend opportunities for process improvement and risk control development to drive your organization credit culture, desire, and business performance.

Yes, but: Interface so that your design is implementing an effective portfolio risk management process that invest in identifying, managing, monitoring, and reducing risks in the portfolio assets.

Meanwhile: Safeguard that your team is involved in analyzing and assessing financial organization capital, liquidity, credit, market and operational risk management and risk governance.

Between the lines: Assess ongoing market risk and new market opportunities, including analyzing key market trends and developments in the commercial business credit environment and advising management regarding needed commercial portfolio strategy changes and concentration risk levels.

What they’re saying: "Verify that your company partners and collaborates with internal teams to deliver risk analysis and future-state control advisory services by integrating operational, credit, market, and business risk review/consulting processes with credit, market, and technology processes and by providing input into the development and implementation of automated solutions to enhance productivity.", Sharon W. - VP, Controllership - Accounting Policy

What to watch: Check that your design works with credit strategy teams and business to define business requirements and oversees the development and execution of testing plans to ensure excellence in delivery for product launches implementation of technology projects that impact credit strategies and credit risk infrastructure.

Under the hood: Lead the preparation of written Credit Approval and Credit Risk Review Packages for both new and existing (internal) customers in partnership with Business Development and Portfolio Management (new (internal) customers) and with Portfolio Management only (existing (internal) customers).

Be smart: Oversee implementation of Business Intelligence and ETL solutions across multiple projects, providing direction to the Credit Risk Management team during project delivery and ensuring implementations support technology and business roadmaps.

The bottom line: Make sure the Credit team is responsible for the management of all aspects of the credit risk mitigation effort including researching and analyzing new and existing counterparties to determine appropriate levels of exposure, negotiating and structuring of contracts and credit support arrangements, and monitoring and reporting of credit exposures and events.

What’s next: Confirm that your group is assisting with all stages of credit and risk initiatives and projects across the organization, utilizing credit policy knowledge and portfolio management skills in identification and implementation of process improvements and control programs.

ICYMI: Make sure the Analytics team is responsible for developing risk management products through data and analytical solutions built on top of your organizations big data resources.

Top thinkers are using The Art of Service Critical Capabilities Analysis, the Kanban that’s helping leaders stay ahead of what’s next.

This Kanban will help you plan your roadmap.

BENEFITS:

The Critical Capabilities and Priorities Kanban enables leaders to shortlist out of 1946 appropriate results, already prioritized to:

How does your organization have confidence that a hedge of its portfolio credit risk will work?

Does your organization have access to sufficient portfolio management techniques, including credit risk mitigation tools?

Does your organization have a documented credit risk management policy revision procedure?

Does your organization have a credit risk management procedure and do you know what it is?

Does your organization have a written credit risk review policy that is reviewed and approved by the board of directors at least annually?

Does your organization have a documented credit risk management guideline or policy?

Does your organization have a set credit policy that contributes to credit risk management?

Has your organization evaluated its exposures to direct and indirect credit risk arising from current market credit and liquidity conditions?

Does your organizations risk assessment aggregate exposures organization wide and across lines of business?

Does your organization rely on third parties to perform any portion of its risk management function?




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