Managing Non-Financial Risks

IACPM/ BCG Study 2020

Financial institutions need to accept some risks in their day-to-day business to generate profit. Over the past decade abilities to manage credit and market risks have significantly improved.

Non-financial risks related to Information Security & Cyber, Climate Change & ESG, Pandemics & Resiliency, Reputational Risk, and Technological Innovation/ Digital Risk are emerging. Traditional forms of credit and portfolio analysis need to be augmented with new ways to consistently identify, assess and measure these risks so that they can be incorporated in credit decision processes, risk appetite statements, portfolio management, as well as strategic planning exercises. Lack of experience and scarcity of historical data make this a daunting task.

The IACPM has partnered with the Boston Consulting Group (BCG) to conduct a study on the topic which will focus on identifying and addressing non-financial risks affecting credit portfolios. 

The study has been directed by a working group of IACPM member volunteers to ensure the greatest value to IACPM members. The survey launched in late June 2020 and is currently underway.

For more information please contact Juliane Saary-Littman.