Wednesday, April 17, 2013
7:30 a.m. - 8:15 a.m.
Breakfast and Registration
8:15 a.m. – 8:30 a.m.
Welcome & Introductions
Edward J. DeMarco Jr., General Counsel & Director of Operational Risk, The Risk Management Association
8:30 a.m. – 9:15 a.m.
Keynote
Future Challenges in Operational Risk
Daniel J. Roussell, Senior Vice President & Head of Operational Risk, State Street Corp
Session will focus on problem areas for practitioners as operational risk moves forward as a discipline. The discussion will cover integration of all data types (qualitative and quantitative) into a single focused information stream and explore the challenges in creating and implementing an effective challenge program.
9:15 a.m. – 10:00 a.m.
Keynote
Embedding Risk Culture to Drive Value
M. Robert Rose, Chief Credit Officer, Brookline Bank & RMA Chair
10:00 a.m. – 10:30 a.m.
Break
10:30 a.m. – 11:15 a.m.
AMAG Update
Kenneth J Fuerst, SVP - ORIC Capital Modeling, HSBC North America Holdings
Robin L. Phillips, Managing Director, Corporate Operational Risk Executive, Bank of America
The Advanced Measurement Approaches Group (AMAG), sponsored by RMA, consists of twenty (20) large mandatory and opt-in AMA banks regulated in the US. During the past year the Group developed and conducted two new range-of-practice (ROP) member surveys. The first explore a short list of the “thorny” quantitative topics that have been the most challenging for the industry and regulators alike; the second addressed a wide range of AMA management challenges, ranging from scenario analysis practices to program effectiveness.
The panelists for this session, Robin Philips, Chair of AMAG, and Ken Fuerst, leader of the AMAG's Date and Capital Model subgroup, will share some highlights of those recent ROP surveys and latest industry positions that have been developed or are emerging from the Group's work.
The AMAG was formed by RMA in 2005 at the suggestion of a senior U.S. bank regulator to enhance the industry-regulatory dialogue and ensure a successful implementation of AMA. It is open to any mandatory or opt-in AMA bank regulated in the U.S.
11:20 a.m. – 12:05 p.m.
Scenario Analysis
Beth Rudofker, Managing Director, Head of Firmwide Operational Risk, JP Morgan Chase
Are you prepared for the unexpected? Identifying significant and plausible operational risk loss scenarios that may not have happened is a critical component of managing risk and quantifying exposure. Explore techniques for harnessing the expertise in your organization to identify, assess and mitigate what may have been considered unimaginable in the past.
The Role of Operational Risk in Strong Risk Management
Jodi L. Richard, EVP and Regional Head of Operational Risk and Control, HSBC North America Data Management & Regulatory Reporting
Sound risk management in large and small institutions incorporates operational risk management as a key feature. But how do the challenges faced by both differ? Explore new strategies to best leverage your operational risk management system to deliver on strong risk management whether your bank is a large institution or a growing community bank.
A Modern Day Enterprise Compliance Risk Management Program
Timothy Burniston, Vice President Senior Director for Professional Services, Wolters Kluwer
JB Sloan, Sr. Product Market Manager, Enterprise Risk Management, Risk and Compliance, Wolters Kluwer
The rapid pace of regulatory change coupled with intensified supervision, changes in the regulatory oversight structure, and heavier sanctions for noncompliance signal mounting concern about the daunting challenges faced by financial institutions. This session will provide a review of high-impact regulatory trends and best practices for creating a program to ensure compliance and establish effective controls over compliance risks that transcends business lines.
12:15 p.m. – 1:15 p.m.
Lunch
1:30 p.m. – 2:15 p.m.
The Use of Forward-Thinking RCSAs
Grace Baltusnik, Managing Vice President, Operational Risk Program Executive, Capital One
This session will include a review of ideas on how to build and leverage a Risk and Control Self-Assessment (RCSA) process as a useful, forward-looking risk management tool. The session will explore possible pitfalls in the design and use of RCSAs and ways to avoid these pitfalls.
The Role of Risk Management in New Product Development
Kevin Slane, Director of Enterprise and Operational Risk, Hancock Whitney Bank
Improve your understanding of the driving issues behind improving banks understanding of the risks resulting from new or materially changed banking products. The session will provide insights into effective approaches that enable risk management and business areas to work collaboratively to better understand potential risks and ensure the appropriate control infrastructure is in place as part of the product introduction or change.
Operationalizing Risk Tolerance
Eric Holmquist, Managing Director, Accume Partners
Once senior management and the board have set risk appetite and tolerance levels, how do you operationalize them throughout the organization? What does that look like for IT, operations, back-office, etc? How do you connect the dots between the “big-picture” risk appetite and day-to-day operations? Topics covered will include: translating top-level risk tolerances into operational metrics; measuring and monitoring risk against risk appetite; and creating meaningful reporting around risk appetite and tolerance.
2:15 p.m. – 3:00 p.m.
KRIs – Moving from Lagging to Leading Indicators; Can they truly be predictive of loss?
Robin L. Phillips, Managing Director, Corporate Operational Risk Executive, Bank of America
Why does the industry continue to make mistakes that turn out to be financially expensive and reputationally damaging? We still manage operational risk largely by looking in the rear view mirror. This session will explore the search for key risk indicators that can be effective in helping us understand our critical exposures and avoid disasters.
The Role of Risk in Compensation Design, Administration and Execution and Changes in Levels and Design of the Compensation of Risk Professionals
Brian Dunn, Chairman, McLagan, and CEO Performance/Reward/Talent, Aon Hewitt
Mark S. Behnke, Former Head of Compensation, Benefits and Shared Services, Bank of America
Explore two important aspects of the intersection of risk and compensation: 1) the increasingly prominent role of risk professionals in the design, determination, and review of incentive compensation programs; and 2) the amount and type of compensation.
Stress Testing as a Risk Management Tool
Michael J. Stevens, ERM Analytics and Business Intelligence Manager, BB&T
The presentation begins with a comparison of earnings-at-risk concepts with enterprise stress testing, as exemplified by the FRB’s CCAR process, placing both in the context of enterprise risk management. Next, the presentation briefly explores the challenges of operational risk modeling, including both LDA and OR stress testing. The presentation concludes with an invitation to discuss the merits of a more business process based approach to OR measurement and modeling, as well as a call for more open and frequent knowledge sharing amongst OR practitioners as a way to accelerate development of methodologies that enhance firm performance.
3:00 p.m. – 3:30 p.m.
Break
3:30 p.m. – 4:15 p.m.
Integrating Operational Risk Stress Testing within the ICAAP Process
Peter Dodic, Senior Manager and Operational Risk Officer, Bank of Montreal
Roxana Ciobanu, Senior Manager, Operational Risk Methodology and Analytics, Bank of Montreal
Hear an overview of BMO Financial Group’s operational risk stress testing program and linkage to ICAAP. This session will cover BMO’s operational risk management framework and stress testing program, and how BMO aligns them with ICAAP requirements. The review will cover past practices and limitations, plus a new approach that links macroeconomic stress and operational risk loss experience.
Social Media & Operational Risk
Edward J. DeMarco Jr., General Counsel & Director of Operational Risk, The Risk Management Association
We will discuss if and why operational risk managers should care about employees’ use of social media. The lines between private conduct and company-related conduct have blurred because of the use of social media, resulting in an increased risk of employees negatively impacting a company’s brand; i.e., self-inflicted reputation risk. We will review how the use of social media can impact a company’s intellectual property rights, how to use social media in connection with the hiring process, and how a company should manage its social media presence.
The Role of Risk Management in M&A Transactions
J. David Thompson, Managing Director, Chief Operational Risk Officer, Bank of New York Mellon
Examine the role of risk management in planning and conducting due diligence for M&A transactions. Learn how to assess and mitigate the risks of transactions, how transactions are approved, and how the risks of on-boarding are monitored and controlled. Hear about lessons learned from past transactions.
4:15 p.m. – 5:00 p.m.
Combating Consumer Fraud
Edward J. Keck, Jr. MBA, CISSP, Senior Director, Treliant Risk Advisors
Discover the practical issues related to the use of new technologies, coupled with increasing consumer demands. Delve into ways to develop prevention, detection, and response strategies.
A Risk Management Approach to Cyber Security
Stephany Head, Ph.D., President, OpRisk Associates, LLC
Currently, most cyber security investments are reactive. There are three elements that can move an organization from reactive to proactive:
Understanding trends in cyber-security in order to create solutions that stand the test of time. One of the top 10-cyber security trends for 2012 is that regulatory requirements will intensify, with the legislation learning toward specific guidance on risk assessment and standard IT security controls. Understanding trends in cyber security can improve the framework for risk-based decision making and prioritization under resource constraints, thereby reducing potential losses in time to an acceptable level while demonstrating the (cost) effectiveness and efficiency of risk reduction initiatives.
A commitment to regularly conduct cyber security risk assessments. An organization’s dedication to a risk management-based approach to cyber security is based on recognition that cyber security risk is still at a relatively early stage of development, and a standard approach for quantifying cyber security risk has yet to emerge. A cyber security risk assessment can improve the level of risk consciousness throughout the organization’s value chain and promote the organization’s desire to manage cyber security risk appropriately.
Develop a formal cyber security Risk Implementation Management Plan. The leading organizations are developing Cyber Security Risk Implementation Management Plans (RMIP). A Cyber Security RMIP is a formalized risk management program designed to foster an organizational climate and governance structure where information security risk is considered within the context of the strategic goals and objectives of the organization.
Causal Analysis – Problem Solving by Asking Why
Susan Wong, Managing Director, Corporate Risk Management, TD Ameritrade
Learn about the Root Cause Analysis program at TD Ameritrade. Discover how TD identifies problems in its program and conducts analysis in order to create action plans that prevent reoccurrence.
5:00 p.m. – 5:45 p.m.
Panel Discussion - Risk Management in the Securities Industry
Ovidio Montemayor, Director - Financial Market Services Group, TD Ameritrade
Joel G. Oswald, Principal, Willams & Jensen PLLC
Vito Arno, SVP Operational Risk & Investment Proxy Research, Fidelity Investments
Patrick Dignan, Managing Director, TD Securities USA
Managing Operational Risk is one of the most significant challenges facing the securities industry. There is an increasing need to include operational risk processes in each facet of the business, enabling firms to anticipate potential events vs. reacting to them. One of the major challenges and opportunities we’re facing today is assessing and controlling the inherent risks with daily operations in order to keep up with the blazing pace of technology and information. The management of operational risk has undoubtedly become increasingly important among financial institutions in recent years. It is not that operational risk management is a new practice for firms; however, as a result of rising expectations from management, shareholders, and regulators it is becoming increasingly more significant and complex.
The Industry has been challenged in many different ways in the past few years and 2012 proved to be no exception. The industry issues ranged from market making software and IT risk management issues to IPO problems and even a devastating natural disaster. As a result, the pressure continues to build while the industry is faced with keeping up with the aggressive reform agenda, increased operational risk pressure and industry infrastructure demands. Operational Risk, as a discipline is still maturing under the pressures and it provides a tremendous opportunity to evolve the discipline together!
5:45 p.m. – 6:30 p.m.
Network Reception