There is considerable uncertainty about the financial position of small businesses which have been hardest hit by the pandemic and the flow-on impacts for income producing property. Additionally, the pandemic has accelerated changes in the structural demand for office and retail space.
Lenders with rich data and sophisticated portfolio management practices will be better positioned to navigate through this period of uncertainty – able to quickly identify opportunities to strategically adjust underwriting standards, policies and portfolio allocations with the requisite clarity and confidence.
Supporting customers and managing risks in loan deferral programs. This is the most challenging, stressful experience many borrowers will ever face and community expectations of support are high. It is imperative that potential failures – of process, system or people – are identified fast and enable timely uplift in credit decisioning, assessment and customer support strategies.
Why does it take Royal Commissions, media reports, shareholder activism and litigation before boards and senior leaders recognise that issues of culture, and the behaviours it may engender, represent material risks to business outcomes?
The world may have hit a peak in toilet paper sales but it is likely most households and businesses will be reaching peak debt and beyond in the foreseeable future.
Most financial institutions have adopted the three lines of defence risk management system. History has shown that it has not prevented the occurrence of risk failures since its emergence. In theory, it sounds like a relatively simple concept – in practice, it has been difficult to implement and embed.
On 2 October 2019, ASIC released the first report from its corporate governance taskforce: ‘Director and officer oversight of non‑financial risk. The depth of the report is a strong indicator of the level of scrutiny this category of risk will continue to receive from regulators in the coming years.
The Federal Reserve Bank of New York’s hosted its annual culture conference last week ‘Building Cultural Capital in the Financial Services Industry: Emerging Practices, Risks and Opportunities’.
Many of our clients are asking us about the implications of APRA’s proposed changes to the existing Prudential Standard APS 220 Credit Quality following the release of its discussion paper and draft new standard for consultation.