Regardless of the industry where you work, today’s businesses operate within a risk landscape that is constantly changing. For financial institutions, a good business plan will constantly review ways to mitigate and manage risks. Although bankers risk insurance is in place, the effects of a claim or situation of questionability can devastate the company’s reputation. Carrying an insurance policy is a wise strategy, but it reactionary and offers defense against financial loss. A risk management approach is an offensive way to combat the risks.
As the experts at FGIB understand, there is a growing concern for tighter regulatory action against financial institutions. The financial crisis of 2008 has shifted the court of public opinion to less tolerance with bank failures, and this can be any area of operations. The new trends in risk management will be to prevent another financial crisis in accordance with more clearly defined and further-reaching regulatory control by federal agencies. Areas of the crackdown in the United States will include:
Even with the increased efforts to comply with these regulation, banks or financial institutions can still face potential claims or fines for areas where actions have fallen short. The more specific and comprehensive the insurance policy carried, the better the institution will fair financially during resolution. However, the best way to face these new trends is through a risk management plan.