Risk management

The ever-increasing volatility and complexity around financial markets has created ongoing downside risk for financial institutions. Without a strong understanding of the risk factors, combined with robust methodologies on how to manage them, financial institutions are virtually guaranteed to lose money.

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Expertise Areas

Capital management

We ensure the institution’s capital is in line with the requirements of the regulators, reviewing and analysing internal assessment of the level of risk being taken, the expectations of the rating agencies and debt-holders as well as the returns expected by shareholders.

Enterprise risk management

We provide a structured approach – aligning strategy, processes, people, technology and knowledge – with the purpose of evaluating and managing the opportunities, uncertainties and threats the institution faces as it creates value. We integrate risk management effectively across an organisation’s risk universe, business units and operating divisions, geographical locations and legal entities.

Cyber security

Security vulnerabilities are pervasive across most organisations.  Identifying potential areas of vulnerability, and then developing appropriate counter measures, is at the core of effective security management.  However, the real challenge is knowing exactly what and where investments should be made.  This requires an understanding of not only the vulnerability, but its criticality and how it should be remediated. 

Digital risk

A revolution is under way in how people spend, manage and borrow money. Customers expect easy-to-use technology that allows them to bank where and when they please. This shift towards digital banking strikes at the heart of the distribution model that has served the banking industry for more than 250 years. However, as banks release app after app, their risk functions are struggling to keep up.

Regulatory advisory

The cumulative cost of delivering the regulatory agenda, coupled with long-term structural reform, has become a major distraction for banks. Identifying the synergies and overlaps between existing and planned regulatory programmes presents an opportunity to reduce cost and increase overall delivery efficiency, while removing operational instability.

Conduct risk

Managing conduct risk remains a critical consideration for firms. While progress has been made, many firms are struggling to identify meaningful, forward-looking metrics and data-gathering techniques to inform necessary management action. This is primarily down to a limited understanding of how conduct risk co-exists with operational risk and other post-crisis control frameworks.

Quantitative risk analysis

We provide robust quantitative risk solutions, where required, across the risk universe.

Projects

Validation of the assessment of SAFCOM

Project name:
Validation of the assessment of SAFCOM

Service:
Risk management

Sector:
Financial Services
Public and Social

Client:
Financial Services Board

Date:
2014

Country:
South Africa


The Financial Services Board (FSB) appointed Genesis Analytics, working in conjunction with Bourse Consult, to validate its assessment of the Safex Clearing Company (Pty) Ltd (SAFCOM, now JSE Clear). This was conducted in terms of the CPSS-IOSCO Principles for Financial Markets Infrastructures (PFMIs).

Building on previous work conducted by the FSB that confirmed SAFCOM as a Qualifying Central Counterparty (QCCP), the scope of Genesis's work was to address the FSB's findings and conclusions with regards to SAFCOM's compliance with the relevant PFMIs and specifically to validate SAFCOM's margin model, back-testing, calculation of the default fund and stress testing model.

The findings from Genesis's analysis were provided to the regulator and formed an important part of the FSB's subsequent annual review of SAFCOM's compliance with the PFMIs.

Review of risk management processes for tier-2 bank

Project name:
Review of Risk Management Processes for tier-2 bank

Service:
Financial institution expertise
Risk management

Sector:
Financial Services

Client:
Confidential

Date:
2014

Country:
South Africa


Genesis was commissioned by a tier-2 South African bank to review its current risk management processes and perform a gap analysis against best practices. The review covered ALM/Market risk, liquidity and credit risk.

Two gap analysis methodologies/approaches were taken:

·       The gap analysis between the current state and industry like-to-like bank comparison

·       The gap analysis between the 'to-be' state (above organic growth) and the industry

Based on the findings, Genesis Analytics was able to identify and recommend process enhancements, system enhancements and enhanced risk analysis.

Stress-testing submission to Bank of England

Project name:
Risk appetite, stress-testing and optimisation

Service:
Financial institution expertise
Risk management

Sector:
Financial Services

Client:
A big four South African bank

Date:
2015

Country:
South Africa


Genesis assisted with the co-ordination and production of the stress-testing submission of a big four South African bank to the Bank of England.

Risk framework for Botswana financial institution

Project name:
Risk Review and Development of Risk Management Framework

Service:
Risk management

Sector:
Financial Services

Client:
Confidential

Date:
2016

Country:
Botswana


Genesis Analytics was asked to review the risk management operations of a financial institution in Botswana and to develop a risk management framework.

Genesis assessed the risk management and internal audit as well as the regulatory framework procedures and reporting. An analysis mapped business strategies for risk management governance and potential risk exposures. This resulted in a gap analysis and led to processes to close the gaps.  Finally a comprehensive risk management framework was developed along with a detailed road map for developing a qualitative and quantitative risk appetite statement.

Based on the risk framework, the proposed business strategy and the road map, the client could document a statement that articulated and quantified its risk appetite based on a proposed business strategy.

An indicative/education tool on cost of banking regulation

Project name:
An indicative/education tool on the cost of banking regulation

Service:
Risk management
Regulatory economics and accounting
Financial institution expertise

Sector:
Financial Services

Client:
Banking Association of South Africa

Date:
2015

Country:
South Africa


We developed an indicative cost of regulation model for the South African banking sector to demonstrate how the bank regulations created a regulatory cost across specific products for the Banking Association South Africa (BASA).

The project models the quantitative cost impact of regulation on specific asset products. The model is a relatively simple one and makes key assumptions.  The model is not a pricing tool as it has no economic information.  This model is not used by banks because it is too simple and would not withstand regulatory scrutiny. However, it is a valuable tool to educate stakeholders on the cost of regulation attributed to the Banks Act.

The model establishes a regulatory capital cost as a result of changing regulations initiated by the international standard-setting body, the Basel Committee on Banking Supervision, since 1988.

The model is built using our sample bank's public financials to provide real-world key inputs and it is based on the Basel capital regulatory requirements, liquidity and leverage ratio requirements evolved over time as a quantifiable and comparable cost to be recovered by the bank from the economy. 

GIPS assessment and implementation plan for private clients

Project name:
GIPS assessment and implementation plan for private clients

Service:
Risk management
Financial institution expertise

Sector:
Financial Services

Client:
Confidential

Date:
2015

Country:
South Africa


Genesis was commissioned by a large African bank to perform a Global Investment Portfolio Standards (GIPS) assessment and implementation for the bank’s private clients. Phase 1 focused on providing guidance on GIPS requirements and performing a gap analysis. Phase 2 focused on the Implementation of solutions to become GIPS compliant.

Meet the Team

Areas of Service Expertise

  • Capital management
  • Enterprise risk management
  • Cyber security
  • Digital risk
  • Regulatory advisory
  • Conduct risk
  • Quantitative risk analysis

Projects

Project

Validation of the assessment of SAFCOM

The Financial Services Board (FSB) appointed Genesis Analytics, working in conjunction with Bourse Consult, to validate its assessment of the Safex Clearing Company (Pty) Ltd (SAFCOM, now JSE Clear). This was conducted in terms of the CPSS-IOSCO Principles for Financial Markets Infrastructures (PFMIs).

View Project
Project

Review of risk management processes for tier-2 bank

Genesis was commissioned by a tier-2 South African bank to review its current risk management processes and perform a gap analysis against best practices. The review covered ALM/Market risk, liquidity and credit risk.

View Project

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Leading the team

James Bernstein

Risk Management

James Bernstein
Risk Management
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Richard Ketley

Director and Managing Partner (Financial Services Strategy)

Richard Ketley
Director and Managing Partner (Financial Services Strategy)
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