COVID-19 triggers great nonfinancial risk crisis: Nonfinancial risk management best practices in Canada
Abstract
The spread of viral disease COVID-19 is the most transformative nonfinancial risk (NFR) of this decade triggering the Great Nonfinancial Risk Crisis. The uniting of strategy and risk management has never been more crucial for financial institutions. The interrelationship between the pandemic and the increases in ageing, chronic diseases, interstate conflicts, nationalism, cyber attacks, cyber dependency, asset bubble, and sovereign debt is transforming our reality in previously unimaginable ways. NFR management best practices Canadian Financial Institutions (FIs) prioritised NFR and adopted a NFR framework that enabled them to identify the spread of viral disease (COVID-19). Then they reprioritised COVID-19 risk into their existing enterprise risk management framework to reduce the exposure and impact of the pandemic and re-evaluated their strategic assumptions to reset their business strategy in light of the reprioritised risk matrix. In this paper, the author reviews best practices in managing NFRs and trends from the practitioner’s point of view. Thirteen Canadian FIs are reviewed along with their positioning of NFR pre- and post-COVID-19, and their recent enhancements to their NFR-management process. The author illustrates how the adoption of the Global Risks and Trends Framework by several Canadian FIs has influenced their preparation and resilience in this pandemic. Finally, the author discusses best practice examples, as well as challenges that still exist, how organisations have adjusted their strategy linking risk to their recent experience, and what lessons other FIs can learn about managing these NFRs.
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Author's Biography
Lois Tullo has taught risk management at the Schulich School of Business, York University for the past 23 years at the executive, master of business administration and undergraduate levels. The author is an Executive in Residence at the Global Risk Institute. The author’s area of expertise is the management and quantification of nonfinancial risk (NFR). The author’s other publications include Global Risks and Trends Framework (GRAFT), Distribution Analysis for Information Risk — A Cyber Quantification Framework, and ERM Canadian Best Practices. The author is the chief risk officer/chief commercial officer at a digital asset derivatives fintech, and the past chief financial officer for CIBC Finance Inc. The author is Chair of the Board at Urban Promise, Vice Chair at the Richview Foundation, and past board of director at Jameson Bank. The author holds a Bachelor of commerce degree from the University of Saskatchewan, a masters’ in business administration from the University of Western Ontario, and Chartered Professional Accountant/Chartered Accountant, IDC.D and chief compliance officer designations.
Citation
Tullo, Lois (2020, December 1). COVID-19 triggers great nonfinancial risk crisis: Nonfinancial risk management best practices in Canada. In the Journal of Risk Management in Financial Institutions, Volume 14, Issue 1. https://doi.org/10.69554/UWFT7787.
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