FS Brochure April 2015

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Risk Management inFinancial Services

The Institute of Risk Management – Qualifications



The effects of the global financial crisis are still apparent to us all as theywork their way through the world economy in the form of widespread public

debt and economic slowdown. The events of that period certainly came as awake-up call for risk management, some even placing the sole blame for thecrisis on poor risk management in financial institutions or questioning thefundamental usefulness of risk management as a business discipline.

Employers are now recognising theneed to invest in enterprise-wide risk

education, instead of relying on piecemealapproaches to market, credit, regulatoryand operational risks. A fully enterprise-wide approach will ensure good riskmanagement is effectively incorporatedinto decision-making processes acrossthe organisation at every level. Thisqualification addresses these needs.

‘The individual skills of those responsiblefor leading the risk activities within

an organization provide insight intothe competencies needed to drive asustainable risk program... the enterpriserisk manager will need to pay specialattention to developing leadership skills,strategic thinking, ethical judgment,innovative decision-making andcommunication, to name a few.’

Risk and Insurance Management SocietyExecutive Report on the 2008 Financial Crisis

What makes IRM stand outThe Institute of Risk Management (IRM) is the world’sleading enterprise-wide risk education Institute. We

are independent, well-respected advocates of the riskprofession, owned by practising risk professionals.IRM passionately believes in the importance of riskmanagement and that investment in education andcontinuing professional development leads to moreeffective risk management. We provide qualifications,short courses and events at a range of levels fromintroductory to expert. IRM supports risk professionalsby providing the skills and tools needed to put theoryinto practice to deal with the demands of a constantlychanging, sophisticated and challenging businessenvironment. We operate internationally, with membersand students in over 50 countries, drawn from a variety of

risk-related disciplines and a wide range of industries.Indeed, IRM’s pan-sector approach sets us apart fromtraditional providers in the sector and ensures thatlessons learned in other industries are effectively appliedto financial services.

As a not-for-profit organisation, IRM reinvests any surplusfrom its activities in the development of internationalqualifications, membership, short courses and events.



The qualification that sets you apartThe global financial crisis starkly demonstrated whatcan happen when an enterprise-wide approach to risk

is not taken.This qualification provides you with a broad practicalknowledge of enterprise-wide risk managementtechniques relevant to a successful risk management careerin financial services.

It is ideal for risk management generalists who need toquickly adapt to a financial services environment. It is alsoa logical progression for aspiring chief risk officers in thefinancial services sector.

Learn from top risk practitioners

This practical qualification addresses the real issuesfacing organisations in the financial services sector,in particular banking and insurance. The course hasbeen developed by a team of international industrypractitioners who, together with leading universityand business school experts have imparted theirextensive front-line experience.

Course aimsThe qualification provides a thorough introductionto sources of risk and describes the tools, techniques,systems, processes and strategies necessary for managing

risk in banks and insurance companies. The course alsofocuses on the critical importance of personal skills inimplementing effective risk management and the needfor commitment from all levels within an organisation.

The course outlines how regulatory environments havedriven approaches to managing risk and explores whetherthe global financial crisis has shown previous approachesto be inadequate.

The purpose of the course is to develop the essentialskills for the application of enterprise-wide risk to thespecific requirements of the financial services sector.It also provides an understanding of technical terms toenable communication with specialists such as credit risk

modellers and actuaries.

Learning outcomes at a glance

After completing the course, you willbe able to:

• understand the main sources of risk inthe banking and insurance sectors

• understand the approaches used bythe banking and insurance sectors tomanage risk

• understand a typical enterprise-wide riskmodel in a financial services organisation

• identify the regulatory imperatives thathelp drive risk management in banking andinsurance and understand what regulators are

seeking to achieve• understand the role of the chief risk officer

and the risk management function in afinancial services organisation

• examine whether the global crisis of 2007/8showed weaknesses in the approaches to riskmanagement and regulation in the bankingand insurance sectors that were in place atthe time

• understand the differences between banksand insurers with regard to risk management

matters• identify the importance of personal and

interpersonal skills, incentives, communicationand ethics in the financial services sector

www.theirm.org



Course structure and content

Background to the financialservices sector

•

What is meant by financial servicesand why the sector is important tothe global economy

• The importance of risk-taking withinthe sector

• The interconnected nature of globalfinancial markets

Key concepts in financialservices risk management

• The key financial and statisticaltechniques that underpin riskmanagement in financial services(e.g. VaR and Monte Carlosimulations.)

• The importance of financial andnon-financial quantification

• The concept of economic capitaland other methodologies such asscenario analysis and stress testing

• The application of financial risktechniques in asset managementand hedge fund businesses as wellas other, non financial organisations(e.g. trading desks in energy firms)

Operational risk infinancial services

• Key sources of operational risk infinancial services – people, processes,systems and external events

• Common approaches used toidentify, monitor and control keyoperational risks

The syllabus is logically structured into nine units.

Sources and approachesto risks in banks

•

Key sources of risk within the retailand wholesale banking industry• Common approaches to the

identification, assessment andcontrol of key risks, such as creditrisk, market risk, operational riskand liquidity risk

Development of theregulatory frameworkfor banks

•

The role of regulation in banking,including consumer protectionand improving confidence infinancial markets

• Why regulation seeks to imposeminimum risk managementstandards

• The background and limitations ofthe Basel Capital Accord

• The development of bankingregulation through thedevelopment of Basel II andintroduces the concept of Basel III

•

The structure of and keyrequirements of, the Basel Accordand the Three Pillars

• The purpose of the Sarbanes-OxleyAct and the approach taken bymajor financial institutions

Unit

1Unit

4

Unit

5

Unit

3

2

Unit



Sources and approachesto risk in insurance

•

Key sources of risk within the lifeand non-life insurance industries• Common approaches to the

identification, assessment andcontrol of insurance risk, credit risk,market risk, operational risk andliquidity risk

Development of theregulatory frameworkfor insurers

•

The development of insuranceregulation starting with Solvency Iand why Solvency II was developed

• The background, purpose, structureand implementation of Solvency IIand initiatives such as PSB (UK) andMaRisk (Germany)

• The international context ofinsurance regulation includingthe work of the InternationalAssociation of Insurance Supervisorscountries seeking equivalenceto Solvency II (e.g. Bermuda,

Switzerland and Mexico)• The development of insurance

regulation in the USA (e.g. NAIC)• The impact of regulation on the

role of the risk manager andthe actuary as well as other riskgovernance implications

Lessons from failure

• The recent history of losses in thefinancial services sector including

Barings Bank, Lloyd’s of London(and the formation of Equitas),Equitable Life, Independent, AIG,Lehman Brothers and more

• Why the losses occurred and thedevelopments in risk managementthat have evolved in response tothese losses

• Responses to the global financialcrisis by regulators and the industry(e.g. Walker review in the UKand the possibility of new globalsuper regulators)

• Was the global financial crisis causedby the failure of risk managementor human practices?

• Why group risk, contagion,brand and consumer confidenceare so important to the financialservices sector

• The importance of thebehavioural and people elementsof risk management

ERM in financialservices context

• ERM in financial servicesorganisations, given the context ofthe regulatory developments andthe lessons learnt from failures

Unit

Unit

6

Unit

7

Unit

8

4

Unit

9

‘The most remarkable finding is that most risk professionals –on the whole a highly analytical, data rational group – believethe banking crisis was caused not so much by technical failuresas by failure in organisational culture and ethics.’

The RiskMinds 2009 Risk Managers’ Survey designed and conductedby Moore, Carter & Associates and Cranfield School of Management



Who should take thequalification?

The course has been designed toprovide you with a broad practicalknowledge of enterprise-wide riskmanagement techniques relevant tofinancial services and therefore willbe of benefit to those working in:

• banks - retail and wholesale

• insurance - life, general,international and brokers

• regulators and credit ratingagencies

• hedge funds and asset management

• actuarial, legal and accountingpractices

What support dostudents get?

As a student, you will receivea detailed course handbookcovering course aims, learningoutcomes, syllabus, directed readingand self assessment questions.Reading materials include a mix

of physical textbooks and a varietyof websites, reports, surveys, papersand other references.

Support is also provided through theInstitute’s online student supportarea, which includes access to:

• online discussion forums

• course tutors

• practice examination papers

In addition, students may attend apractical revision workshop which is

designed to help you prepare for theexamination at the end of the course.Attendance also provides you withthe opportunity to meet and networkwith other students and tutors.

What are the entryrequirements?

The course is open to all and doesnot have any formal prior learningrequirements.

Are there any exemptions?

The course is an integratedprogramme, so no exemptionsare granted.

How is the course assessed?

The course is assessed througha 3 hour written examination.

Where can I take the course?Distance learning enables studentsto study anywhere in the world.The Institute has existing examinationcentres in over 30 countriesworldwide and can assist in settingup special centres if there is currentlyno centre in your country.

When are the examinations?

There are two intakes each year.Enrolment is open from October toDecember and March to May.

Examinations take place in June andNovember/December respectively.

What is includedin the course fee?

Fees are reviewed annually. Current

rates can be found on IRM’s website.The course fee includes:

• detailed course handbook

• essential learning materials

• online discussion forum

• practice examination papers

• attendance at a practicalrevision workshop

• examination fees

• complimentary membership ofthe Institute

• access to IRM’sonline resource centre

• access to special interest groupsincluding ERM, Solvency IIand Financial Services

• subscription to Risk ManagementProfessional magazine

For non-UK students, there isa discounted fee available,which excludes the cost of therevision workshop.

What happens after I havecompleted the course?

Successful completion enables you toapply for Specialist membership of theInstitute of Risk Management, which

entitles you to use the designatoryletters SIRM.

Membership ensures continuity inreceiving IRM benefits, and ongoinglearning through continuingprofessional development (CPD)or further qualifications such asIRM’s International Diploma in RiskManagement.

‘ The failure of the financial system is often explained in termsof sub-prime mortgages, CDOs and a resulting liquidity crisis.But these are just the symptoms that happened to be aroundbecause of a much more fundamental malaise. That malaisecan be best described as a fundamental breakdown of twocritical balancing acts in the boardroom. Firstly, the balancebetween risk taking and risk avoidance. The second balance isthat between the performance culture and corporate ethics.’

Richard Anderson of Wipro Consulting,Risk: not just for banks, CIR October 2009



A selection of organisations who havesupported staff to study with IRM

Allianz

Amlin

Aon

Aviva

AXA Corporate Solutions

Bank of England

Bank of Latvia

Bank of New York

Barclaycard

Barclays

FSA

Lloyds Banking Group

Lloyd’s of London

Marsh

Nationwide

Prudential

Royal Bank of Scotland

SantanderWillis

XL Group

Zurich

How to apply?

Application forms can be downloaded from IRM’swebsite www.theirm.org or requested from IRM’soffice. All forms and fees should be returned by theclosing date of enrolment to either:

[email protected]

The Institute of Risk Management2nd Floor, Sackville House143-149 Fenchurch StreetLondon, EC3M 6BN

United Kingdom

Complimentary membershipEveryone studying for the qualification will be givencomplimentary membership of IRM for the duration oftheir studies. This provides a wealth of benefits such asaccess to our online resource centre, networking at themembers’ groups, free or discounted entry to IRM eventsand copies of the Institute’s magazine: Risk ManagementProfessional.



The Institute of Risk Management2nd Floor, Sackville House143-149 Fenchurch StreetLondonEC3M 6BN

+44 (0)20 7709 9808 [email protected] www.theirm.org

Limited by Guarantee Registered in England No.2009507IRM is proud to be a member of IFRIMA

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FS Brochure April 2015