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An enterprise wide risk management approach or ERM is practice of enabling an organization to consider the potential impact of all types of risk for application in strategy setting, to identify potential effect that may affect the business and manage the risks within the its risk appetite for providing reasonable assurance regarding achievement of the business objectives of the organization. This practice is effected by the board of directors, management and other employees of the organization.
A successful ERM initiative in a Bank can affect the likelihood and consequences of risk materializing, as well as deliver benefits related to better informed strategic decision and increased operational efficiency. A proper ERM practice will help in reduction of cost of capital, more accurate financial reporting and better market perception ensuring competitive edge.
for any new business, ERM is Enterprise Risk Management. It is a long process where analysts look into the business and it's operations both the main and secondary, In order to achieve success, analysts should look into everything and think outside the box.
For banks, ERM would look into physical risks, such as properties and personal properties. Financial risks, such as credits and stock and reputation.
It takes more than a few words to analyze an ERM project for a bank.
