Introduction to Part III: Tools and instruments for non-financial risk management

Thomas Kaiser





Introduction to Part I: The origins of non-financial risk management


The complete history of operational risk regulation (abridged)


Financial institutions and non-financial risk: Learning from the corporate approach


The painful financial side of NFR


“Risk management is about managing risk” and “It’s all about people”: Psychology might be more important than models


The confusion of Babel: What’s in the name NFR – taxonomy

Introduction to Part II: Governance of non-financial risk management


“It’s the culture, stupid”: Risk culture as the key building block of NFR management – and why some banks have come through the Covid-19 pandemic better than others


Do you know who is who? Three lines of defence in the context of NFR


Herding cats? NFR divisions as truly diverse units


“Just do it!”: Partially self-organising governance structures for NFR frameworks

Introduction to Part III: Tools and instruments for non-financial risk management


A risk by any other name: Identification, classification and agendas


Old but gold? Mastering the RCSA despite Covid-19


Biases in scenario analyses and how to mitigate them


When scenarios are not severe enough: Stress testing for non-financial risk


Ending NFR in NFR: From Excel sheets to professional IT systems for NFR management


Breaking up with risk management: Using the power of controls for good not the prevention of evil

Introduction to Part IV: Focus areas of non-financial risk management


It won’t be over after Covid-19: Pandemics and operational resilience


Dealing with IT complexity and innovation: Delivering business resilience and customer outcomes


Protecting the new gold: Information security


Conduct risk and the impact of Covid-19


From lawsuits to models: Compliance risk and financial crime


Others are doing it cheaper: But can they really? Opportunities and risks in outsourcing


Managing reputation and stakeholders

Introduction to Part V: The future of non-financial risk management


ESG risk as a new (and very important) trigger for NFR


Looking into the crystal ball: What will NFR management look like in 2030?


This time will be different: An alternative future of NFR management


Right time, right place: The drive for change in operational and non-financial risk

Non-financial risk includes reputational risk, but also has reputational risks of its own. One of those is the fact there is no single instrument to identify and assess non-financial risk, but rather a myriad of different ways of doing it – or at least trying to do it. Hence, financial risk people tend to feel superior to non-financial risk people – as they have this one, powerful(?) tool: a value-at-risk model. In addition to the vision some overarching non-financial risk management divisions might have, the various disciplines (such as compliance, information security, business continuity management and many more) – sometimes driven by very peculiar regulatory requirements – see the need to come up with their own version of, for instance, self-assessment.

Therefore, it is important to understand in detail what a risk and control self-assessment (RCSA) or similar is supposed to achieve, how it relates to scenario analysis, and what added benefit (in addition to being compliant with regulation) stress testing might deliver. All these tools are meant to provide some (qualitative or semi-quantitative) forecast. These should be contrasted (beware of the anchoring effect and other

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