Bank Risk Management Training

A bank risk management course instructs participants on how to limit losses in operations.

A bank risk management training program instructs employees and top management on tools and methodologies needed to avoid significant losses in financial markets' activities as well as in internal operations. A risk management curriculum focuses on financial risks, such as market and credit risks, and provides course participants with techniques and processes used in limiting these risks.

Purposes

A bank risk management training program helps a program participant stay up to date with the latest developments in market and credit risk management tools. For instance, a training course may focus on math concepts and techniques that banks use to identify market risk. A training session also may cover recent changes in regulatory guidelines, such as Internal Revenue Service (IRS) rules regarding banking fiscal laws. Alternatively, a training course may teach a program participant how to establish adequate controls to correct operational risks.

Types

A bank risk management curriculum may provide various courses online, on-site, at a professional event or at a university. Let's say a senior bank risk manager wants to learn about new credit risk calculation tools. She may log onto a secure Web portal, select relevant courses and complete the session. She also may attend a conference sponsored by the American Bankers Association (ABA). Alternatively, she may take courses on company premises or at a local university.

Features

A risk management program at a bank may cover various topics, depending on skill needs, industry, bank transactions and training budget. A course may relate to market and credit risks, and how mathematicians compute these risks under two or more market scenarios. A training session may instruct participants on how to use generally accepted auditing standards (GAAS) to identify problems in operating procedures. A bank risk management course also may focus on compliance risk, that is, the risk that employees may not comply with regulations when performing duties.

Benefits

An effective risk management training provides many benefits to participants. Assume an accounting manager at a Pennsylvania-based thrift institution attends a risk management session. He may learn about financial risks and how to apply generally accepted accounting principles (GAAP) to a bank's financial statements. He also may become familiar with internal audit processes used in control evaluation, such as periodic reviews and random tests.

Expert Insight

A bank risk management training curriculum occasionally may cover complex subjects or topics in which a bank's staff does not have expertise. A training coordinator may, in these cases, hire a specialist to clarify difficult topics. As an illustration, a training coordinator at an investment bank may hire a former U.S. congressman to elucidate complex topics around banking compliance rules.

References

• ISACA: Risk and Control Self-Assessment (RCSA): A Useful Complement to Information Systems Audits at Stanford University
• The University of Texas: COSO and Self Assessment
• New York Institute of Finance: Credit Risk
• The Wharton School of the University of Pennsylvania: Commercial Bank Risk Management
• Bank for International Settlements: Risk Management Principles for Electronic Banking