The Building Society Risk Function – How Effective Is Yours?

This blog is part of a series of insights on Building Society risk management.

One of the key focus areas of regulatory reviews performed over the last 18 months has been the effectiveness of the Risk Function. As part of the feedback issued to Building Societies following their supervisory review and evaluation process, the Prudential Regulation Authority ('PRA') has emphasised that it considers an effective Risk Function to be crucial to the future well-being of societies and the successful delivery of their business strategies.

Where weaknesses have been displayed either by the personnel employed within the Risk Function or within the role and remit of the function, this has led the PRA to cast doubt over the quality of the risk management within that organisation and whether the current function is fit for purpose.