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AD 613 Lecture 4.pptx - Enterprise Risk Planning AD 613...

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Enterprise Risk PlanningAD 613Aditi TaylorSpring 2020Week 4Today’s Topics:Risk AnalyticsStrategic RiskReputational RiskOperational RiskVendor RiskBusiness Continuity Risk
LOGISTICSRemember no class Feb.18th
DEBRIEF ASSIGNMENTPaper 1: You are the Risk Manager for a publicly traded biotech company that produces aniche drug for a rare disease. The company is looking to expand globally and you areresponsible for identifying and assessing risks, including developing a risk appetite statement.How would you go about identifying relevant risks and quantifying them?-How did you go about the research?-What were the key areas you looked at?-What was your experience?
RISK ANALYTICSBusiness leaders as being asked to rely on hard data to better understand key riskfactors and their relative importance in real numbers to identify future risks beforethey become reality for the organization.
VALUE OF RISK ANALYTICSImproving PerformanceRisk analytics techniques enables a company to measure, quantify and predict riskwith more certainty than ever before.This is a major shift for many organizations that in the past relied on intuition andopinions of leaders at the business unit level to monitor, assess and report risk.It establishes a baseline for measuring risk across the organization by pullingtogether many strands of risk into one unified system and offering executives clarityin identifying, viewing, understanding and managing risk.This unified approach helps boards and executives integrate risk consideration intostrategic decision making and where business unit and functions incorporate riskintelligence into the actions that they take.
WHERE CAN IT BE USED?Improve decision making by providing risk analysis, insights and transparencyIncrease return on capital by making risk-informed decisions on how to optimizecapital allocation and qualify for regulatory incentives under Dodd-Frank, BaselII/III, Solvency II and moreAccelerate and streamline risk processes to reduce costs from credit losses andmanage operational riskReduce the cost of regulatory compliance; dynamically evolve with a riskarchitecture that can efficiently adapt as risk management practices, clientdemands, and regulations changeCombat eCommerce fraud, increase revenue, reduce operations costs and improvethe overall customer experiencePredictive models in the banking industry are developed to bring certainty acrossthe risk scores for individual customers. Credit scores are built to predictindividual’s delinquency behavior and widely used to evaluate the credit worthinessof an applicant.
STRATEGIC RISK
STRATEGIC RISKStrategic risk arises when a company fails to anticipate the market’s needs in timeto meet them.

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Term
Summer
Professor
NoProfessor
Tags
The Land, Operational risk, risk manager

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