Tech Bytes: Andersen and Secura Develop Risk Model

Arthur Andersen & Co. and Secura Group announced this week the development of a business process model banks can use to improve their risk management systems.

The consulting firms' Comprehensive Business Risk Management Model is designed to help banks react to increased regulatory scrutiny over how they assess investment and operational risk.

"This comprehensive business risk approach is a way for all institutions, large and small, to manage the distinct risk categories identified by the Office of the Comptroller of the Currency and the Federal Reserve," said Bill Browning, a partner in Arthur Andersen's financial markets group.

"Simply appointing a risk manager is not enough," he said; "instead, responsibilities should be aligned to meet regulatory expectations and manage all business risks to an acceptable level that supports the business strategies of the organization."

"Faced with mergers and acquisitions, nontraditonal product expansion, and regulatory pressures, financial institutions need to establish a common business risk language," said Carol Beaumier, a consultant at the Secura Group, based in Washington.

"This common language - understood by CEOs and managers alike through the organization - allows institutions to assess the quantity of business risks," she said, and "also the quality of the risk process in place."