ERM For Financial Institutions: Mitigating Risk Amid Regulatory Pressures And Requirements

Financial institutions are in an environment of increasing regulation, such as oversight from the U.S. Consumer Financial Protection Bureau and other regulators, as well as new capital requirements, stress testing and other obligations. Consequently, they must understand their risks. For these organizations to gain a better perspective of their risks and define ongoing strategies to address their unique challenges, implementing an Enterprise Risk Management (ERM) program is a key strategic step toward staying ahead of the game.

"ERM can also help financial institutions navigate and assess their strategy and make sure that they understand what potentially may impact their strategy, both negatively and positively," said Bianca Sarrach, Manager, Advisory Services at Brown Smith Wallace. "ERM puts all of that into one bucket and really helps a bank or any financial institution understand the risk certain strategies may have on the business."