Insights

The latest insights, ideas, and perspectives. Explore a cross-section of up-to-date content on the trends shaping the future of business and society.

Our firm is done checking-the-box on data...

BCBS 239, commonly known as the Risk Data Aggregation and Reporting Principles, where you strategic in your implementation?

Risk and Finance data are the heart of any firm. Information so rich they provide you with foresight that can be used to gain a competitive advantage.

In our view, not just banks should be considering the regulatory principles. The 11 principles cover how data will be collected, stored, analysed, transformed into management information and reported to all stakeholders including investors and regulators which will require enhanced data governance, systems, processes and controls.

The adoption of the principles is further substantiated by the fact that regulators are considering to use the principles as the benchmark standard for financial reporting and across other sectors outside of banking.

Our assessment is that firms who adopt the principles will be more resilient to future change and be better able to respond to threats and opportunities.

Reputational Risk...

Yes we heard it before don’t damage your reputation but sometimes its out of your control or is it?

Imagine the damage to your brand and reputation which could destroy your firm due to the impact on earnings and funding, as a result of any association, action or in-action which is perceived by stakeholders to not be in-line with society values. It is for this reason the firm should continuously identify potential causes of reputational risk throughout the value chain, subjecting each cause to a materiality assessment, so as to either completely mitigate or minimise the impact.

When last have you done an assessment? Firms depend on each other to operate as good corporate citizens, for example firms that implement ESG practices demonstrate their commitment to environmental sustainability, social responsibility, and ethical business practices. This helps build trust and credibility with all stakeholders, including clients, employees, vendors and investors.

Climate Change, net zero...

Have you considered the impact on your business model? Is your business still sustainable?

The materialisation of climate risks can have a significant impact on households, firms and the global economy. For example, floods can cause damage to buildings and disrupt production, leaving people displaced and unable to generate an income.

For both households and firms, this could erode the value of their assets and increase the probability of default on their debt, possibly leaving them destitute. That was a simple example of how climate risks translates into financial risks impacting us all.

It is for this reason you need to understand both the physical and transitional risks associated with climate risk. As we transition to a net zero, the world as you know it will see fundamental policy changes, some industries disappear as green technology processes are adopted, changes in consumer preferences and behaviour. Is your business footprint on the same path?