Thematic Review of Risk Management Maturity – Summary of Key Findings

Thematic Review of Risk Management Maturity – Summary of Key Findings

Earlier this year, the Central Bank of Ireland (CBI) conducted a Thematic Review of Risk Management Maturity in Credit Unions. While the CBI acknowledges the progress that credit unions have made in terms of risk management maturity, it has highlighted some key areas for improvement. Below, we’ve briefly summarised these findings.

“Good governance and robust risk management are necessary and critical business enablers for credit unions in protecting members’ funds, addressing current challenges and leveraging available opportunities”

Patrick Casey, Registrar of Credit Unions, 2021

Board Ownership and Oversight

  • Little evidence of ownership of risk management by the Board (communicating actions, decisions, and feedback on reports).
  • Little evidence in many cases of robust discussion taking place at Board meetings on risk-related issues.
  • Little evidence of engagement between the Board and the RMO on decisions taken to mitigate risks.
  • Limited face-to-face interaction between the Board and the RMO (infrequent attendance at Board meetings).
  • Large dependency on a small number of Board members to address the issues raised by the RMO relating to risk.
  • Over reliance on sub-committees (e.g. Audit & Risk Committee)
  • Lack of evidence of regular reviews of the risk management framework (by the BoD)
  • Lack of evidence of involvement of the RMO in the development and maintenance of the strategic plan

 

Risk Management Function – Structure and Framework

  • Disconnect between 1LoD and 2LoD – little or no engagement between the front-line staff and the RMO.
  • Risk-related work done by 2LoD in a ‘silo’ – typically RMO, CEO and the management team.
  • No formal process for front-line staff (first line of defence) to report existing or potential risks.
  • Issues with independence of the RMF – RMO not reporting directly to the Board on a regular basis.
  • CEO requesting substantive changes to reports before being submitted to sub-committees / Board.
  • RMO being involved in ‘operational’ / first line of defence work.
  • Inconsistencies in the application of policies, procedures and other documentation relating to risk management.
  • Issues with the practically of risk registers – too many risks, duplication and not reflecting the risk profile of the credit union.

 

Risk Management Reporting

  • Fewer risk reports submitted than expected as per the credit union’s own policy
  • Work to do regarding the quality of risk reporting – lacking in detail, not tailored sufficiently for the CU and not discussing areas that have been previously flagged in regulatory engagements.

 

Training & Culture

  • Lack of evidence of training being planned for.
  • No evidence of training being provided in relation to the CU’s own risk management framework.
  • Lack of clarity around how policy updates are communicated to all in the credit union

 

Click here for more information on how the CalQRisk solution can help your credit union with its risk management obligations.

Recent News

Navigating Risk: A Strategic Approach to Risk Management 

In the vast ocean of business, navigating through turbulent waters demands more than just a sturdy ship; it ...
Read More

Challenges of Reporting Risk and Compliance in Multi-Academy Trusts 

In the intricate tapestry of educational governance, Multi-Academy Trusts (MATs) have emerged as model offering collaboration and shared ...
Read More

Navigating Delegate Oversight – A Balancing Act

In the fast-paced world of fund management, delegate oversight is paramount. However, this oversight comes with its fair ...
Read More

Tennis Ireland implements CalQRisk to streamline their approach to governance

Tennis Ireland have recently implemented the CalQRisk solution to transform their approach to board and committee meetings and ...
Read More

Regulatory & Supervisory Outlook Report – 5 Key Risk Topics for Credit Unions

The Central Bank of Ireland has published its Regulatory & Supervisory Outlook Report 2024 which includes the Central ...
Read More

CalQRisk shortlisted in RegTech Insight Awards

The CalQRisk solution has been shortlisted for two awards at the upcoming RegTech Insight Awards – Best Solution ...
Read More

Footprint Underwriting onboards CalQRisk for risk management and compliance

Footprint Underwriting, a leading underwriting agency in Ireland, has recently implemented the CalQRisk solution in order to enhance ...
Read More

Climate-Related & Environmental Risk Assessment Guide

A Climate & Environmental Risk Assessment Guide was issued to Risk Advisory Service subscribers in Dec 2023 following ...
Read More

Loan Product Risk Assessment Guide

The Risk Advisory Service Loan Product Risk Assessment Guide circulated recently provides a framework for conducting risk assessments ...
Read More

Risk Today – Strategic Planning

Last quarter’s Risk Today e-zine for CalQRisk’s Risk Advisory Service subscribers, focusses on how Risk Management Officers can ...
Read More