This document discusses integrating risk management outputs into the business planning process. It outlines how a bank can use its risk register and risk assessments to help guide strategic planning and focus on key risk areas. By considering risks, a bank can develop better customer service policies, identify new business opportunities and risks, and ensure strategic decisions are robust. Failure to incorporate risk management can lead to unrealistic growth projections and an inability to create sustainable competitive advantages. The document advocates for risk management to become a core part of a company's strategic planning and decision making.

1. Integrating the Output from
Risk Workshops into the
Business Planning Process
Presented by:
Eneni Oduwole
Group Head, Operational Risk Mgt.
Guaranty Trust Bank Plc

2. Outline
• Strategic Planning
• Risk Management (RM) Output
• Planning for Superior Delivery
• RM Enablers
• RM Areas of Focus / Communication Improvement
• Strategy & Risk Interplay
• RM & Value Creation
• RM & Strategic Planning
• Failure to Incorporate RM

3. Introduction
Which comes first, Is it,
the Chicken or Risk Management or
the Egg? Strategy Planning?

4. Overview
• Strategic planning requires clarifying the overall
purpose and desired results of an organization,
and how those results will be achieved
• It is a disciplined effort to produce fundamental
decisions and actions that shape and guide what
an organization is, what it does, and why it does
it, with a focus on the future

5. Case Study
• Its 2008, CSBank Ltd is about to review its strategic
plan; a few months ago, it concluded its Risk & Control
Self Assessment
• Is there any need to refer to the output of its Risk
Assessment?
• What should be the drivers of its strategic planning?
• What areas of its business require focus to achieve its
growth plan and desired first mover advantage with new
business opportunities?

6. Risk Management Process
- Output
• Risk Register / Log
• identification of prevalent risks
• prioritized list of risks
• impacts identified
• Residual risks
• Risk Appetite & Tolerance Levels
Desired business model, organizational
structures and business strategies

7. Contents of a Risk Register
• Risk description  Approved final response
• Risk owner  Contingency / Action
plan
• Risk Category
 Fallback plan
• Cause of the Risk
 Cost of
• Impact of the Risk mitigation/fallback plans
• Probability / Frequency of  Time required for risk
occurrence responses
• Risk Rating  Current status of the risk
• Proposed responses

8. Planning for Excellent / Superior
Service Delivery
• Develop Customer Service Policy
• Build customer loyalty
• Create a positive environment
• Establish an image of quality & professionalism
• Ensure prompt & effective customer complaints mgt
• Ensure management awareness of key criticisms
• Going the extra mile; beat competition
• Develop customized services
• Maintain customer feedback vehicle
• Train all staff on service delivery and products

9. Risk Management Enablers
• Develop Customer Service Policy
– Risk Governance
• Build customer loyalty
– Track business volumes and demographics of customers (reward
systems, promotions, special events)
• Create a positive environment
– Risk Assessments
• Establish an image of quality & professionalism
– Track customer, agencies and regulators’ ratings
• Prompt and effective customer complaints management
– Track no. of customer complaints logged, treated and outstanding

10. Risk Management Enablers
(cont’d)
• Management awareness of key criticisms
– Risk Reporting
• Going the extra mile; beat competition
– Peer group analysis / Risk Reporting
• Develop customized services
– Review of customer behaviour / Trend Analysis
• Maintain customer feedback vehicle
– Track number of feedback, areas of business commended and areas
not mentioned at all
• Training on service delivery and products
– Track number of staff trained on service delivery, product offering &
number of complaints against staff attitude and product knowledge

11. RM Areas of Focus’
The Economist

12. Risk Communication Improvement
The Economist

13. Strategy/Risk Interplay
Strategy RM
Objectives Assure Value-Creation Enhance Value
Create new opportunities Create new opportunities
Value 1 Invest in new business activities that Opportunity/threat identification /
promise gainful returns; expected to mitigation in new activities, price deals to
exceed capital cost compensate for such risks
Improve performance Improve performance
Value 2 Increase returns on existing business Measure loss exposure on cash flows.
with better tech, processes, policies, Risk/Reward, aggregated capital,
knowledge etc. scenario analyses, opportunity costs
Harvest existing value Harvest existing value
Value 3 Evaluate, exit non-profitable business Market analysis, risk mapping, risk
adjusted performance measurement
Align risk-taking with risk appetite Align risk-taking with risk appetite
Value 4 Assurance that company is not gambling Discipline, focus & control, only take risks
its future; avoid risk averse behaviour or equipped to handle, capital adequacy
excessive competitiveness

14. Risk Management and Value
Creation
Effective ERM
Enable more risk
Increase predictability
Decrease leakages and taking which
of earnings & control
Loss build-up increases earnings
downside risk
upside
Increase value of
company

15. RM & Strategic Planning
• Evaluate risk profile of strategic decisions for a more
robust business strategy
• Ensure that the policies, procedures, measures and
monitoring are established and continuously improved
• Provide periodic updates / reports to the Board and
Management on identified risks, achieved targets /
returns and residuals risks

16. Failure To Incorporate RM
• Informal / reactive evaluation leading to either
conservative or exaggerated growth scenarios in
developing strategic plans
• Subjective reasoning feeds the process
• Little or no risk adjustment mechanism
• Inability to maximize potential for creating sustainable
competitive advantage

17. TO CREATE VALUE
ALWAYS CONSIDER
RISK STRATEGY

18. Conclusion
“For firms to succeed in this increasingly global and
competitive marketplace,
risk management must become a state of mind.
A systematic and proactive enterprise-wide approach to
managing risks is essential to
making risk management
an integral part of the company’s DNA”
ANURAG SAKSENA
– Chief Enterprise Risk Officer, Freddie Mac

19. Thank you...