risk advisory for financial institutions

8/14/2019 Risk Advisory for Financial Institutions

1/12Risk Advisory Services for Financial Institutions 1

Risk Advisory Services

for Financial Institutions


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Intro

ducti

oGood risk management doesnt slow anorganization down it helps it go faster.


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Risk Advisory Services for Financial Institutions 3

The Ernst & Young Financial Services Risk team is built

on competency by addressing clients strategic and

operational challenges, which are relevant to todays

environment.

Strengthen your lines of defense and turn risks into

opportunities

The Ernst & Young Financial Services Risk team assist

its clients in all areas of the three-lines of defense model:

Internal Audit

Internal Controls

Governance, Risk & Compliance

Regulatory Services

Our team of professionals combine:

Sector-driven subject matter specialists in banking &

capital markets, asset management and insurance

Depth of knowledge and experience that comes

from working for and with diverse and leading

organizations

Extensive understanding of local culture, values and

languages

Regulatory pressure continues to increase for nancial institutions.

In this business environment, executive management and board members

want a deeper understanding of their key business risks, how these risks are

being managed in their businesses and, in particular, how to manage risk to

create the greatest return for their shareholders.

Ernst & Young won Hong Kong Most Admired

Knowledge Enterprise (MAKE) Award (2010)

Say they are still in

the process of shifting

the culture

Noshift

Makingprogress

Signicantlyshifting

23%

73%

4%

If you are going to have a risk culture throughout the

company, you need the heads of the lines of business

to walk the walk and talk the talk.

Source : 2010 The Institute of International Finance (IIF) Report

Ernst & Young is one of the most globally integrated

organizations in professional services. Our mindset,

actions and structure are unique in our profession.

We are globally connected and locally engaged. Our

global approach and our ability to provide a consistent

and harmonized service everywhere help us to make a

difference by helping our clients achieve their potential.

Risk Owner

Management Board

Risk BusinessUnits

RiskTaker

(independent)Risk Controlling

Functions

RiskController

InternalAudit

IndependentAssurance

!

Present in all lines of the Three-Lines of Defense Model

Firms are on a journey to instill awareness and ownership of risk


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In

tern

ala

udit Companies value the roleInternal Audit plays. Executives

want Internal Audit to not onlysee what has gone before,

but also what comes next.They want Internal Audit toprovide insights into strategicinitiatives, and to shareideas that improve businessperformance. And they want itnow.


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Our Ernst & Young internal audit service delivery

platform underlies a common language and framework

comprised of three independent sets of activities: Assess,

Improve, and Monitor (AIM), that we will align to yourbusiness needs to address your evolving risk prole.

Our services include:

Internal audit outsourcing & co-sourcing

Internal audit risk assessment

Internal audit quality assessment

Functional performance assessment

Internal audit transformation

Training

Ernst & Young has provided internal audit services for over 25 years,

and our goal is to help clients create leading internal audit functions. We

accomplish this goal by sharing innovative and effective industry leading

practices and processes with our clients. We have invested USD150 million

in creating proven internal audit methodologies and technologies.

One of my clients is a large European insurance

group developing exponentially in Asia. We helped

them to tailor their internal audit program, by

applying Group-wide standards, to the risks faced

locally and delivered efciently in a co-sourcing

arrangement.

As a former head of an internal audit department

for a large insurer, I know how difcult it can

be to execute the audit plan. Adding value to

internal audit through practical and pertinent

recommendations is paramount. I apply the Ernst

& Young methodology and tailor it precisely to my

clients business products and systems.

FlorenceSenior Manager

Advisory Risk Greater China


Ernst & Young has internal audit relationships

with more Fortune 500 companies than anyother Big Four Organization.

Source: 2012 Fortune 500 Market Share Ernst & YoungSurvey.

We went to Ernst & Young because of their clear

leadership in internal audit - coupled with the fact

that this was an important decision for us. It wasa bit like the 80s when you went to IBM for your

computer and Xerox for your photocopier.

Global Audit Director, UK listed bank

Internal audit


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Inte

rnalcont

rol 82% of global institutional investors

will pay a premium for companiesthat demonstrate successful riskmanagement1

61% will not invest where there is

evidence of poor risk management2

79% of organizations with mature

risk management systemsare either moderately or verysuccessful at protecting and

enhancing shareholder value

3

1 & 2Investors on risk,Ernst & Young,2006

3Global EnterpriseRisk ManagementSurvey, AON,2010


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A greater understanding of risks and controls can result

in enhanced delivery of cost-reduction activities. Rating

agencies are also increasingly interested in companies

risk management.

By combining our knowledge and experience of risks and controls, we

can help your company enhance your process control efciency and

effectiveness.


What can be a better reference than one that

comes from within a clients own organization?

We worked with the compliance team of a very

large multi-national nancial institution helping

them review their internal controls over certain

processes. They were so impressed with the

quality of the work we delivered and with our

people who performed above the normal call of

duty, that they continue to call us and refer our

team to other departments in their company

whenever they need assistance not only for area

of internal controls but also other business needs

where our team and Ernst & Young are able to

assist.

Aris

Manager



Risks and controls assessment

Evaluation of operating effectiveness Internal controls assessment and evaluation relative

to strategic, compliance, operational and / or nancial

risks

Formulation of appropriate actions / remediation plans

Design of improvements to processes and controls

SOX 404 assessment, testing and monitoring

Pre-IPO internal controls advisory

ISAE 3402/ SSAE 16

Ernst & Young ranked 1st in the

Operational Risk & Regulation

Consultancy Ranking in 2010 & 2011.

Source: The Operational Risk & Regulation consultancy rankingsare based on a poll of OR&R readers conducted in December 2011.

Internal controls


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Governance

,Ri

sk&

Com

plia

nceAn average company spends 4%of revenue on risk management

activities.The Ernst & Young approach to GRCensures that organizations not onlyleverage their risk spend and reducetheir risk of failure, but that theystrike a balance between achievingcompliance and contribute toprotecting and enhancing businessperformance.


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Nearly 70% of organizations are highly reliant on their

Governance / Risk & Compliance (GRC) activities as

a safeguard against failure. However, two-thirds of

companies think this spending and dependency is notmatched by the value that business leaders think they

currently get from their GRC functions. Therefore, there

is a clear need for getting greater value from what

is spent.

We offer a holistic and integrated approach to managing

risk that drives improved business performance. We help

traditionally siloed or disparate risk practices to be

aligned and integrated to achieve greater efciency and

value across the risk value chain. We also help executive

management and board members to manage risk to

create the greatest return for their shareholders.


Enterprise risk assessment

Risk & control framework assessment

Enterprise risk management and governance (ERM)

Operational risk advisory services

96% of Financial Services institutions reported an increased focus on

risk appetite but only 25% reported a link to business decisions. This is

clearly a challenging area.

Our client was required by the regulator to

address accuracy and completeness issues in

their risk catalogue and related internal controlsdocumentation. We were able to mobilize a

bilingual English / Putonghua team of subject

matter specialists to provide high quality

deliverables to be accepted immediately by the

regulator. It was a very enriching experience, I

felt I was able to add a lot of value to my client.

Eric

Senior Manager


Ernst & Young ranked 1st in the areas of Corporate

Governance, Enterprise-Wide Compliance & Risk

Management Strategy & Regulations Strategy.

Source: The Operational Risk & Regulation consultancy rankings are based ona poll of OR&R readers conducted in December 2011.

Governance, Risk & Compliance


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Reg

ulat

oryS

ervic

e Regulation and compliance risks are oneof the most serious challenges perceivedyesterday, today and tomorrow.


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Our work on regulatory and compliance, include the issues on

Anti-money Laundering, FATCA, Solvency II, Basel II & III and Regulatory

Licensing.

With the many updates in anti-money launderingand counter-terrorist nancing regulations,

I have been leading many engagements in

this eld. With my, and my teams wealth of

experience, I can, not only help my clients to

be compliant, but also provide value-added

market insights on the current practices amongst

nancial organizations. My clients really value

this.

Vincent

Manager


One of the myths around FATCA is the Asian

nancial institutions are not impacted by

this American tax legislation. We carried out

an impact assessment for a life insurer with

extended operations in Asia. It was fascinating

delving into the operations and identify impacts

which were unexpected.

SamSenior Manager


Regulatory aspects play an important role when

establishing asset management structure and

also in its on-going operations. More onerous

regulations are forcing asset managers to invest

more time and money in compliance and related

activities. Effectively navigating the increasingly

sophisticated regulatory environment willbe a key challenge and could be a source of

competitive advantage for asset managers over

the next several years. Our aim is to deliver

regulatory and compliance services helping

asset managers to meet the relevant regulatory

requirements while being exible enough to

accommodate future regulatory developments.

Ying

Senior Manager


Regulatory Services

We assist nancial institutions in the development and

implementation of practical solutions to regulatorydirectives and evolving regulatory expectations regarding

compliance, risk management, and internal control

issues. Our team includes professionals with signicant

regulatory and industry experience.

Anti-money Laundering

We assist nancial services organizations in identifying

money laundering risk, reviewing controls over

suspicious activity, assessment of compliance with

regulations and leveraging technology. Our approach

also helps clients to carefully consider important trade-

offs for additional investments in AML programs and

technology solutions.


AML risk assessment

Independent controls testing

Building or enhancing existing programs

Benchmarking to local regulatory requirement and /

or current market practices

Evaluating and implementing software tools and

techniques

Responses to regulatory or supervisory mandates

FATCA

Technical seminars

Impact assessment

Implementation support

SFC Licensing

Hong Kong SFC Licensing

Bank licensing Compliance operations and regulatory advice

Compliance due diligence / internal control reviews

Training

Ernst & Young ranked 1st in the

areas of Anti-Money Laundering,

Basel II/III, Fraud/Financial

Crime Prevention &

Treating Customers Fairly.Source: The Operational Risk & Regulation consultancy

rankings are based on a poll of OR&R readers conducted inDecember 2011.


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Ernst & Young

Assurance | Tax | Transactions | Advisory

About Ernst & Young

Ernst & Young is a global leader in assurance, tax,

transaction and advisory services. Worldwide, our

152,000 people are united by our shared values and

an unwavering commitment to quality. We make adifference by helping our people, our clients and our

wider communities achieve their potential.

Ernst & Young refers to the global organization of

member firms of Ernst & Young Global Limited,

each of which is a separate legal entity. Ernst &

Young Global Limited, a UK company limited by

guarantee, does not provide services to clients. For

more information about our organization, please visit

www.ey.com.

2012 Ernst & Young, China.

All Rights Reserved.

FEA no. 03001984

This publication contains information in summary form and is thereforeintended for general guidance only. It is not intended to be a substitute

for detailed research or the exercise of professional judgment. Neither

the Ernst & Young China practice nor any other member of the global

Ernst & Young organization can accept any responsibility for loss

occasioned to any person acting or refraining from action as a result

of any material in this publication. On any specific matter, reference

should be made to the appropriate advisor.

www.ey.com/china

ED None.

Ernst & Young won the Hewitt Best Employer in China (2009), being the

only professional services organization named in the Top 10 list. This

award is an accomplishment that validates Ernst & Youngs stated goal

of being the Employer of Choice in China, by providing a world-class

working environment for its people, supported by learning, recruitment

and retention policies.

Ernst & Young is present in 20 cities in China and employ more than

10,000 people. We also have access to 152,000 professionals around

the world.

Our risk team is present in Hong Kong, Beijing and Shanghai.

Contact us

Philip Rodd

Partner

Greater China Risk Leader

+852 2846 9028

[email protected]

Florence CarrSenior Manager

+852 2629 3191

[email protected]

Eric Leung

Senior Manager

+852 2629 3886

[email protected]

Samuel Tran

Senior Manager

+852 2846 9721

[email protected]

Ying W Wang

Senior Manager

+86 10 5815 3520

[email protected]

Please visit: www.ey.com/china

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