UAE Risk Management

Our regulatory risk management services

Whatever the level of risk that your business is exposed to, you must ensure you have a UAE risk management framework in place. Our DIFC & ADGM Compliance Advisory team can provide you with the following services to ensure you are meeting your regulatory obligations:

• encouraging the active involvement of the board in the risk management process, including setting the risk appetite of your organisation
• creating an appropriate risk management infrastructure, reflecting clarity of responsibility and accountability, together with independent oversight of the risk management framework, all of which should be supported by documented procedures
• identifying of all risks relevant to your organisation
• assessing the potential impact of each identified risk and an estimate of the likelihood of occurrence of such risk
• providing controls to manage or mitigate those risks
• testing controls to ensure they are operating effectively, and remediating or enhancing the control environment when deficiencies are identified
• reporting to senior management and the board.

The nature of assistance can be tailored to your specific needs and can include:

• advice on the design of your risk management infrastructure
• reviews to determine the effectiveness of your enterprise risk framework
• assistance in the preparation of the risk register
• assistance in the preparation of your Internal Risk Assessment Process (IRAP) and Internal Capital Adequacy Assessment Process (ICAAP).

Cybercrime risk management

Cybercrime is an increasing threat to financial firms and their customers. Cybercrime risk can be broken down into three types:  fraud and theft; system destruction or corruption; loss or misuse of sensitive data.

An enterprise-wide response is required which must be driven by your senior management. It should be a key part of your firm’s enterprise risk framework, and you should apply the same principles to cybercrime risk as you would to credit risk or market risk, including:

• a documented policy
• identification of material risks
• assessment of inherent risk being the impact times the probability of occurrence
• identification of key controls to mitigate the impact and probability of the risk
• calculation of residual risk
• assessment of residual risk compared with risk appetite set by the board.

Knowledge and awareness are key when combatting cybercrime. Waystone Compliance Solutions can arrange training for your staff and presentations for your senior management team to raise awareness about the types of cyber-attacks employed by criminals and highlight the potential vulnerabilities your organisation may be facing. We can also review your control environment and procedures and identify any areas that may require improvement or enhancement.

Preparation of risk inventory

A key part of the risk identification process is the preparation of a firm-wide risk register or risk inventory. Once your board has determined the correct risk appetite, the risk register is a key building block to ensure that you operate in line with that risk appetite.

The risk register sets out in writing all the risks to which you may be exposed. It should cover all parts of your business and you may require different risk registers to address each part of your business.

Having identified the potential risks, you should carry out the following:

• assess the inherent risk of loss – the more complex your business model, the more sophisticated the methodology you will need to use
• identify the controls you have in place – controls should be capable of being audited and should be periodically tested to ensure that they are reliable as a risk mitigating measure
• assess the residual risk – the risk that remains should the controls be operating effectively
• make determinations – determine whether the aggregate firm-wide risk is in line with the risk appetite set by the board
• prepare an ICAAP report – if applicable, an assessment as to whether your firm has sufficient capital in place to enable it to withstand risk events.

Our Middle East Compliance Solutions team has extensive experience in helping firms with preparing a risk register whether as part of a simple risk management framework or as a part of a larger ICAAP report.

To learn more about our UAE risk management solutions, get in touch with your usual Waystone Compliance Solutions representative today.