The key components of preparing your Risk Register

A key part of the risk identification process is the preparation of a firm-wide Risk Register or Risk Inventory. Once your board has determined the risk appetite of your Firm, the Risk Register is a key building block to ensure that you operate in line with that risk appetite.

The Risk Register sets out in writing all the risks to which your Firm may be exposed. It should cover all parts of your business and may require different Risk Registers to be produced for each discrete part of your Firm’s business.

Having identified the universe of potential risks, you need to:

  • Assess the inherent risk of loss - the more complex your business model, the more sophisticated the methodology you will need to use.
  • Identify the controls you have in place - controls should be capable of being audited and should be periodically tested to ensure that reliable as a risk mitigating measure.
  • Assess the residual risk - the risk that remains should the controls be operating effectively.
  • Determine whether the aggregate firm-wide risk is in line with the risk appetite set by the Board.
  • Prepare an ICAAP report - if applicable, an assessment as to whether your Firm has sufficient capital in place to enable it to withstand risk events.

Choosing the right consultant to assist your firm

With more than 30 years in regulatory compliance, CCL has extensive experience in helping firms with preparing a Risk Register whether as part of a simple Risk Management Framework or as a part of a larger ICAAP report. CCL has worked with firms across the financial services spectrum.

We have a dedicated team of experienced compliance consultants who can provide expert assurance and peace of mind. Get in touch to see how we can help your Firm.