Lesson 5.1: Identifying and Assessing Risks
Introduction:
Welcome to the Risk Management module for rebuildingsociety.com, a UK-based Peer-to-Peer (P2P) lending platform that connects individual lenders with UK business borrowers. Rebuildingsociety.com is regulated and authorised by the Financial Conduct Authority (FCA), ensuring that robust risk management practices are integral to our operations.
This lesson will provide an overview of our risk management framework, the processes we use to identify and mitigate risks, and the roles and responsibilities involved in managing these risks. By the end of this lesson, you will understand the importance of risk management in achieving our business objectives and maintaining compliance with regulatory standards.
Learning Objectives:
- Understand the key components of rebuildingsociety.com's Risk Management Framework (RMF).
- Learn about the risk management process and the steps involved in identifying, assessing, and responding to risks.
- Recognise the importance of a risk-aware culture and the role of various stakeholders in risk management.
- Understand the use of risk registers and the responsibilities for monitoring and reporting risks.
1. Overview of Risk Management:
Risk management is essential for balancing our commercial objectives with the risks inherent in our business model. At rebuildingsociety.com, we define risk as the potential for an event or action to adversely affect our ability to achieve our objectives. Effective risk management enables us to identify, assess, monitor, and mitigate these risks, ensuring the long-term success of our platform.
Key Components of Risk Management:
- Risk Identification: The process of recognising potential risks that could impact the business.
- Risk Analysis and Assessment: Evaluating the likelihood and impact of identified risks.
- Risk Response: Developing strategies to mitigate, transfer, accept, or avoid risks.
- Risk Monitoring and Reporting: Continuously tracking risk levels and effectiveness of mitigation strategies, and reporting to relevant stakeholders.