What's Keeping Financial Risk Professionals Awake In 2015?

CFP recently interviewed and surveyed more than 70 senior risk experts from the leading buy and sell side institutions to gain a greater understanding of the current challenges being faced by the industry. Below are some of the priorities on the C-Suite and Directors agendas' for 2015.

Banking Risk Management in 2015:

1. Risk & Regulation
On the radar of risk managers this year, are key regulatory changes such as Basel III, Dodd-Frank & Volcker, CCAR & DFAST, LCR & NSFR and the Enhanced Prudential Standards, demonstrating that the unbated flow of regulatory changes and requirements are still of high priority for financial risk managers with deadlines and requirements still to be met. One difference for 2015 is the focus on utilizing the infrastructure already put in place for improving profitability.

Risk Americas 2015 Agenda Highlight:
Risk Americas 2015 will open with views from Heads and C-Suite
professionals from the Federal Reserve Bank of New York, Deutsche Bank,
Wells Fargo, RBC Capital Markets and Freddie Mac.
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2. Conduct Risk & Culture
Regulators are taking a stronger focus on culture, conduct and incentivization within institutions. With large media coverage and hefty fines, senior executives, Boards and shareholders are growingly concerned with the focus of conduct and culture.

Risk Americas 2015 Agenda Highlight:
May 13 (Day Two) will open with discussions featuring views from the CROs
of Ally Financial, AQR Capital, China Construction Bank, Lazard Ltd, Lloyds
Banking Group, RBC Capital Markets, TriState Capital and XL Group. They
will delve into key topics around how to implement and monitor an effective
risk culture and conduct and designing and setting effective incentives.
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3. Stress Testing & Model Risk
With 5 of the nation's biggest banks failing the Federal Reserve's Annual Stress Tests in 2014, it's no wonder stress testing and model risk are still high on the priority agenda for risk managers in 2015.

Risk Americas 2015 Agenda Highlight:
Key areas of interest discussed in 2015 include governing the CCAR &
DFAST programs,integrating capital and liquidity stress testing, building a
governance structure for regulatory compliance and enhanced model
validation, the scope of models regulators are asking for validation on and
how to establish, set and implement a model risk appetite.
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4. Cyber & Vendor Risk
"No foreign nation, no hacker, should be able to shut down our networks, steal our trade secrets, or invade the privacy of American families, especially our kids." Obama said during his annual State of the Union address. The President has taken the opportunity to urge Congress to finally pass cyber security reforms and legislation that would increase information sharing among private companies and the government, and introduce new penalties for cyber criminals.

Risk Americas 2015 Agenda Highlight:
Experts from the US Department of Homeland Security, US Bank and JP
Morgan Chase will discuss the latest cyber challenges on the horizon, how
you can stay up to date and the need for information sharing across
institutions and industries.
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Insurance Risk Management in 2015:

1. Risk & Regulation
As with sell side institutions, Insurers in particular are focused on implementing and finalizing key regulatory requirements including Solvency II and the ORSA. With key changes in governance, structure and systems needed for the institution to implement these regulations, meeting deadlines by the end of 2015 is number one on the agenda.

Risk Americas 2015 Agenda Highlight:
May 12 (Day One) will feature an update from the Federal Insurance Office
and a discussion with Legal & General and Guardian Life on satisfying and
meeting the requirements of state, federal and international regulators.
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2. ORSA:
The ORSA is fundamentally changing the governance and reporting structures of insurers. First of all, defining what framework and tools are appropriate for the business and then implementing these to build a strong risk management framework is a key challenge.

Risk Americas 2015 Agenda Highlight:
Risk experts from MassMutual, State Farm and Sun Life will be discussing
how the ORSA is changing governance and reporting structures and lines
before the Chair of the NAIC ORSA Committee delivers a review of the
challenges and progress before the final deadlines.
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3. Economic Capital:
Insurers are having to implement economic capital frameworks to comply with the ORSA. With areas of resistance having to be managed, and data and resource complications being faced, implementation and creation of an economic capital framework is high priority.

Risk Americas 2015 Agenda Highlight:
AIG, Brookfield Life Assurance, Genworth Financial and Prudential will
discuss the challenges with the implementation of Economic Capital and how
to create and implement an enterprise-wide Economic Capital Framework to
comply with ORSA.
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4. Model Risk Governance & Stress Testing
With SII's now participating in the annual CCAR process for banks, insurers are preparing for what expectations there will be for stress testing under Solvency II and ORSA. In addition, there is enhanced scrutiny around model governance programs for insurers.

Risk Americas 2015 Agenda Highlight:
AIG's Head of CCAR will discuss how insurers should look to prepare for
stress testing under Solvency II and ORSA and VP, ERM at MassMutual will
provide insights on how to build an effective model governance program in
the US insurance industry.
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Over 80 CROs and Heads of Risk will present at Risk Americas 2015 in New York City in May in front of 300+ senior risk professionals. To find out more about the key challenges on risk managers minds and the latest insights and best practices that will be delivered this May, please visit https://www.risk-americas.com