Episode 6: The Value of Risk Maturity & Implementing A Proven Framework

In a recent episode of SRA's "Risk Intel" podcast, industry experts Michael Glotz, CEO and Co-Founder of SRA, and Beth Watson, Customer Success Director, shared their insights on the benefits of risk maturity frameworks for both banks and regulators. Below is a summary of the top 5 key points from this episode and the benefits you could receive from implementing a risk maturity framework at your institution.

The Value of Risk Maturity Frameworks

Risk maturity frameworks serve as the starting point for establishing a robust enterprise risk management (ERM) program. With over 30 years of experience in the banking industry, Glotz emphasizes the significance of understanding how risk functions are managed and the effectiveness of those processes. These frameworks enable banks to assess their risk programs comprehensively, identify areas of strength and weakness, and develop strategic roadmaps for the future.

‍Enhancing Regulatory Compliance

Risk maturity frameworks act as a comprehensive checklist for regulatory requirements. During regulatory exams, having a well-defined risk management framework in place demonstrates a bank's commitment to sound risk practices. Glotz highlights that the frameworks not only address the regulators' checklist but also incorporate industry best practices. By utilizing these frameworks, banks can educate regulators, showcase their organized approach to risk management, and facilitate more efficient examinations.

"The Risk Maturity Framework, is like a "super-check-list" or a super regulatory check list to ensure you are evaluating the things that regulators find important" - Michael Glotz, CEO & Co-Founder

Collaboration between SRA and The Risk Management Association (RMA)

SRA collaborated with the Risk Management Association (RMA) to develop and validate a robust risk maturity framework. Through extensive consultations with a diverse group of Chief Risk Officers from banks of varying sizes and through direct feedback with RMA's mid-tier council - the framework was enhanced and refined. The resulting industry-leading product offers a comprehensive assessment of risk effectiveness applicable to banks of all asset sizes.

‍To see an OnDemand demo of the tool in action and learn more about our partnership with the RMA - click here.

Streamlined Implementation Process

Watson, with her experience in guiding more than 100 banks through the risk maturity framework journey, highlighted the simplicity and efficiency of the process.

SRA has compiled all the necessary regulations and guidance into organized sections called pillars, making it easy for banks to answer a series of questions. Once the initial assessment is completed, banks can create a three-year roadmap to address identified gaps and enhance their risk maturity. - Beth Watson, Customer Success Director

Continuous Improvement and Benchmarking

Banks are encouraged to update their risk maturity frameworks quarterly to address any identified gaps promptly. A maturity framework facilitate the creation of a roadmap that prioritizes important areas and allows banks to track progress effectively. Additionally, these frameworks enable peer analysis and benchmarking, empowering banks to compare themselves against relevant institutions and further enhance their risk management practices.

Risk maturity frameworks play a crucial role in enabling effective risk management for banks. By implementing and completing a self assessment, a bank can assess their own risk functions, find gaps, comply with regulatory requirements, and develop strategic roadmaps for improvement. The collaboration between SRA and RMA has resulted in a comprehensive industry-leading product that caters to banks of all sizes. As banks continue to prioritize and modernize their risk management programs, a risk maturity framework is a good place to start in ordered to streamline and strengthen the banks risk practices, while ensuring regulatory compliance.

Learn more here