Managing Risks

In: Business and Management

Submitted By kishabrown7
Words 1182
Pages 5
Third-Party Risks

According to the article, “Working Well Together”, managing third party risks is becoming an increasing concern within financial institutions. The article is a compilation of respondents’ answers concerning third party risks. The article outlined three major issues in connection to third party risk: third part risk is causing harm, management program needs to be improved, and not having the full visibility of third party risks. Companies are asking how to gain more visibility into third party risks, who really “owns” the risks, and how can companies set priorities and improve efficiencies. Due to limited resources, most institutions have some type of third party interactions. Companies interact with third party vendors from supplier, transportation, business services, equipment, marketing & sales, & joint ventures. 65% of respondents advise they use third party vendors regularly in their lines of business while only 4% advised they rarely or never use third party vendors. 38% of the respondents expect an increase in their usage of third party vendors while 9% estimate a decrease. The largest third party vendor is from the technology sector and business services being the runner up.
Article Summary The article states that since 65% of companies rely on third party vendors this increases their risk and exposure. At the time of the survey, only 2 companies didn’t use third party vendors. Companies working with third party vendors can have a rewarding relationship but often a higher level of risks where the actual company has no control over the risk. “It is a struggle- true frequency of loss is very low, but when it happens the effect is large, sometimes huge (Owens 2012).” The article states that companies have to choose well their third party vendors due to the risk the companies face. Even though, companies have higher…...

Similar Documents

Managing Weather Risk in Seed Business

...Managing Weather Risk in Seed Business Weather Risks of a Seed Company Weather risk for a seed company is the risk of drop in sales volume on account of adverse weather conditions like excess / deficit in rainfall, extreme temperature and humidity conditions etc. Indian agriculture is predominantly dependent upon monsoon rains, with more than 60% of cultivated area in Kharif being rainfed. This rainfed nature of Indian agriculture makes the business of agri-input company completely dependent upon weather. Very often seed companies find themselves holding large unsold stock because of adverse weather conditions like insufficient or untimely rainfall. Seed companies also find it difficult to move stock from one location to the other because of very short time-period available for selling seeds. Environmental changes happening across the world have made weather more unpredictable. Seed companies are becoming increasingly vulnerable to weather vagaries because of frequent occurrence of extreme weather conditions. Out of last 5 years, India has faced extreme weather conditions in 3 years – drought in 2002, delayed monsoon in 2005 and excess and abnormal rainfall in Western Rajasthan, Gujarat, Maharashtra and MP in 2006. Financial Impact of Weather Risks Extreme weather conditions would throw awry any sales budgeting and planning exercise, and would seriously impact sales and profitability targets of the company. Weather risk increases vulnerability in income statement of the......

Words: 1625 - Pages: 7

Managing Compliance Risk in a Tight Economy

...Managing Compliance Risk in a Tight Economy The aspect of this article is about some of the main challenges that the compliance teams in the United States is up against. These challenges are mainly for global and larger corporation with several locations and diverse, transient workforces. Professional’s responsible for compliance has been severely affected by tight economy and limited budgets, the cost of failing to recognize and alleviate risks of illegal activities like corporate fraud and increase in corruption. However, process automation and smart technology have been accomplished by the professionals to be successful in assessing and managing risks. “A growing number of compliance teams now recognize that managing compliance risks effectively in a resource constrained environment requires the use of smart technology (Nunez, Roger 2010)”. “According to” Nunez and Rogers the challenge for many companies is how to identify and reduce the Foreign Corrupt Practice Act (FCPA) risks posed by employees and non-employees who may not understand the many nuances of anti-corruption and anti-bribery laws and policies. The Foreign Corrupt Practice Act Risk Mitigation Solution considers which agents and workers have a need for corrective action and training, and afterward process both the delivery of targeted communication and education to each worker, plus instant delivery of information on critical risk activities to his or her chief compliance officer. The tools needed by......

Words: 356 - Pages: 2

Managing Risk Lab 9

...Managing Risk in Information Systems Lab 9 Assessment Questions 1. How does documented back-up and recovery procedures help achieve RTO? a. By having effective backup and recovery procedures you should have the necessary resources to restore systems from backups and a repeatable process that is known to succeed in achieving RTO. By documenting and implementing backup and recovery procedures, the process for recovery is much more efficient, helping with the time portion of RTO. 2. True or False. To achieve an RTO of 0, you need 100% redundant, hot-stand-by infrastructure (i.e., IT system, application, and data, etc.). b. True 3. What is most important when considering data back-up? c. Registry, directories, and imperative operating data as well as licensing. 4. What is most important when considering data recovery? d. Most current, working recovery and in a timely manner (fast). 5. What are the risks of using your external e-mail box as a back-up and data storage solution? e. First, you are at the mercy of the provider. If it is a large recovery you may not be able to have internet access to download it. File corruption could be an issue as well as back up size allowable for email. 6. Identify the Total Amount of Time Required to Recover and Install the Lab #9 Assessment Worksheets on Your Student VM Hard Drive and open the file in Microsoft Word to verify integrity. {Insert your timed RTO using your......

Words: 711 - Pages: 3

Managing Risk Lab #9

...should have the necessary resources to restore systems from backups and a repeatable process that is known to succeed in achieving RTO. By documenting and implementing backup and recovery procedures, the process for recovery is much more efficient, helping with the time portion of RTO.   2. True or False. To achieve an RTO of 0, you need 100% redundant, hot-stand-by infrastructure (i.e., IT system, application, and data, etc.).       b. True   3. What is most important when considering data back-up?       c. Registry, directories, and imperative operating data as well as licensing.   4. What is most important when considering data recovery?       d. Most current, working recovery and in a timely manner (fast).   5. What are the risks of using your external e-mail box as a back-up and data storage solution?       e. First, you are at the mercy of the provider. If it is a large recovery you may not be able to have internet access to download it. File corruption could be an issue as well as back up size allowable for email.   6. Identify the Total Amount of Time Required to Recover and Install the Lab #9 Assessment Worksheets on Your Student VM Hard Drive and open the file in Microsoft Word to verify integrity. {Insert your timed RTO using your computer clock – following your documented instructions and steps}.       f. N/A. Was not asked to do this portion of the lab and cannot finish this question.   7. Did you achieve your RTO? What steps and procedures......

Words: 323 - Pages: 2

Managing Currency Risk

...(a) Using a well articulated example show how currency options can be used to manage currency risk. Graphically illustrate the payoffs of the selected case. A. CURRENCY RISK Currency risk is the type of risk that is derived changes in the apparent value of currencies. These changes incur a loss when the profit or the dividends of the investment are calculated from the local currency into the U.S. Dollar. “For example, suppose that a U.S.-based investor purchases a German stock for 100 euros. While holding this bond, the euro exchange rate falls from 1.5 to 1.3 euros per U.S. dollar. When the investor sells the bonds, he or she will realize a 13% loss upon conversion of the profits from euros to U.S. dollars.” ( http://internationalinvest.about.com) MANAGING CURRENCY RISK There are many options when it comes to managing currency risk, these things include options like currency futures, forwards and options. The choice varies from each individual. Most of these options to reduce short term FX risk may be not available in some places and too expensive to be useful in the other places. CURRENCY OPTIONS In general, currency options (Foreign- exchange options) is a derivative financial tool that gives the owner the right but not the obligation to exchange money from one currency to another at a pre- determined exchange rate on a specified date. The appreciation/depreciation of the foreign currencies are indirectly proportional to the exporters profit/loss.......

Words: 1869 - Pages: 8

Managing Risk in Information Systems

...Standard (PCI DDS). The mission of PCI DDS is to develop, maintain, enhance, and disseminate security standards for payment card data protection. The implementation of the company accepting credit card payments must be well thought out, so the company may provide a secure framework for this service to operate in. By the company not minimizing risk , and providing continual check mechanisms and new service could become a potential nightmare. Nightmares put companies out of business. Merchants and payment card processors must apply the information security best practices to ensure the least possible risk to clients. There are 12 points of requirements for businesses that store, process, or transmit payment card data. For our purposes under PCI, we are going to look at 3 components that apply which are assess, remediate, and report. When you assess, you are taking an inventory of your IT assets business processes for payment card processing. During this inventory you analyze and locate any vulnerability that could expose card holder data. After you assess your vulnerabilities you remediate them by fixing the exposures that put the company at risk. Finally, the last fast is your report. The report process validates what has been implemented to meet compliance for local and global payment procedures by credit card. These steps assure payment card data safety. As the IT professional for YieldMore, I would advise them on the best possible implementation of PCI DSS best......

Words: 640 - Pages: 3

Managing Risk in an Unstable World Summary

...factors, political risk is the most important one. Especially emerging market. Political risk is influenced by the passage of laws, the foibles of leaders and the rise of popular movements. All the factors that might politically stabilize or destabilize a country. The significance of any given risk depends on the context of the investment decision. Strategists evaluating emerging markets must be especially vigilant. But even those businesses active only in developed nations should factor political risk into their planning scenarios. From this article we can know that the type of political risk, how to analyze the potential risk, and how to deal with it. Armed with that understanding, business strategists can minimize risks and seize opportunities far beyond their home shores. There are five key points in this article. The first one is Politics is everyone’s business. Any company with exposure in foreign markets needs early, accurate information on political developments. There are four reasons. First, international markets are more interconnected than ever before. Second, for good of ill the United States is making the world a more volatile place and that has changed risk calculations everywhere. Third, the offshoring trend is growing. Fourth, the world is increasingly dependent for energy on states troubled by considerable political risk. The second is What economics can’t tell you. In this point we can know that economic risk analysis and political risk analysis......

Words: 591 - Pages: 3

Managing Risks

...Page 210 2/3/10 4:37:12 PM user-f498 /Users/user-f498/Desktop/03:02_evening/MHBR165:Larson:208 C H A P T E R S E V E N Managing Risk Estimate 5 Project networks 6 Schedule resources & costs 8 l iona rnat Inte ojects pr 15 Define project 4 Reducing duration 9 Introduction 1 Organization 3 Managing risk 7 Monitoring progress 13 Project closure 14 16 Oversig ht 17 Agile P M Strategy 2 Leadership 10 Teams 11 Outsourcing 12 18 Career paths Managing Risk Risk Management Process Step 1: Risk Identification Step 2: Risk Assessment Step 3: Risk Response Development Opportunity Management Contingency Planning Contingency Funding and Time Buffers Step 4: Risk Response Control Change Control Management Summary Appendix 7.1: PERT and PERT Simulation 210 Lar03342_ch07_210-251.indd Page 211 1/30/10 4:54:39 PM user-f501 /Users/user-f501/Desktop/Tempwork/JANUARY 2010/30-01-10/MHBR165:Lars You’ve got to go out on a limb sometimes because that’s where the fruit is. Will Rogers Every project manager understands risks are inherent in projects. No amount of planning can overcome risk, or the inability to control chance events. In the context of projects, risk is an uncertain event or condition that, if it occurs, has a positive or negative effect on project objectives. A risk has a cause and, if it occurs, a consequence. For example, a cause may be a flu virus or change in scope requirements. The event......

Words: 18517 - Pages: 75

Managing Risk

...managing risks in international strategic alliances Risks and guidelines to manage them MANAGING RISK Emphasise protectionof the firm’s own primary resource ♣Risks are relatively low in protecting physical and financial resources, including patents, contracts, logos, and trademarks (ownership protected by law) ♣Risks are high in protecting technological, managerial, and organizational resources ♣Be careful about unintended transfer of knowledge and imitation; you have little legal protection here Introduction: We now discuss the ways in which firms with particular resource orientations can manage the two kinds of risks—relational and performance— inherent in strategic alliances. This will involve managing issues such as control, flexibility, security, and productivity MANAGING RISK Exercise controlthrough contracts, equity, and management. Employ, as appropriate: • Managerial control (have one's own staff in key positions, regular meetings, frequent interactions and communications) • Contractual control(specify usage of properties) • Equity control(majority or shared ownership) Control: When a partner firm contributes primarily property resources and considers relational risk to be the major risk, its concern is that its properties may be misused and that the other party may reap undue benefits. Although properties are protected through legal ownership—and cannot be taken away without the owner's consent—these can still be employed in......

Words: 1998 - Pages: 8

Tools for Managing Weather Risk

...Tools for managing weather risk Characterization Weather derivatives, unlike the financial and stock are used to hedge quantity rather than price risks. As commodity futures have underlying price of the commodity and weather derivatives are based on a measured weather index, depending on the specifics of the contract. For this purpose, relevant weather variables can be measured quantitatively. Most weather contracts – 69% Degree Days are based on indices which measure the deviation of the average daily temperature from a base temperature (mostly 65 ° F or 18 ° C). These indices occur within the energy industry and are designed to correlate well with the consumption of electricity for heating (Heating Degree Days, HDD) or cooling (Cooling Degree Days, CDD). The indices are calculated for each day of the contract and in effect a measure of how cold (HDD) or how warm (CDD) is one day. The index value for the contract period is the cumulative sum of the measured daily deviations from the benchmark. The same principles of aggregation of reported daily values ​​(deviation from a benchmark average and cumulative value) is applied to calculate indexes based on the amount of rain and snow, wind power, etc.. Specific type of indexes are indexes threshold ("event" or called "critical day" index), which report the number of cases (of days) during the contract, which occur in certain weather events, such as average daily temperature exceeds (or falls below) threshold. Types of......

Words: 941 - Pages: 4

Cis 527 Term Paper Managing Risks in Organizations

...CIS 527 Term Paper Managing Risks in Organizations Click Link Below To Buy: http://hwcampus.com/shop/cis-527-term-paper-managing-risks-in-organizations/ Or Visit www.hwcampus.com 1. Term Paper: Managing Organizational Risk Due Week 10 and worth 150 points 2. No longer than a decade ago, IT security professionals had to work hard to persuade organizational leaders about the importance of developing effective risk management plans. Nowadays, due to the plethora of cautionary tales that organizations history provide, business leaders are informed on the need to manage risk and understand the crucial role of an organization’s IT infrastructure on its ability to perform business. A computer incident response team (CIRT) plan can help prepare organizations for incidents that might occur. 3. Write an eight to ten (8-10) page paper in which you: 4. Describe the objectives and main elements of a CIRT plan. 5. Analyze the manner in which a CIRT plan fits into the overall risk management approach of an organization and how it supports other risk management plans. 6. Provide at least two (2) examples of how CIRT plans define the who, what, when, where, and why of the response effort. 7. Analyze the manner in which the development of a CIRT plan enables management to adopt a more proactive approach to risk management. Include recommendations for remaining proactive in the continual improvement and update of CIRT plans. 8. Infer on the evolution of threats over the...

Words: 287 - Pages: 2

Managing Risk in Information System

... JONES AND BARTLETT LEARNING JONES & BARTLETT LEARNING INFORMATION SYSTEMS SECURITY & ASSURANCE SERIES Managing Risk in Information Systems DARRIL GIBSON 91872_TPCP_Gibson.indd 1 7/23/10 2:19 PM World Headquarters Jones & Bartlett Learning 40 Tall Pine Drive Sudbury, MA 01776 978-443-5000 info@jblearning.com www.jblearning.com Jones & Bartlett Learning Canada 6339 Ormindale Way Mississauga, Ontario L5V 1J2 Canada Jones & Bartlett Learning International Barb House, Barb Mews London W6 7PA United Kingdom Jones & Bartlett Learning books and products are available through most bookstores and online booksellers. To contact Jones & Bartlett Learning directly, call 800-832-0034, fax 978-443-8000, or visit our website, www.jblearning.com. Substantial discounts on bulk quantities of Jones & Bartlett Learning publications are available to corporations, professional associations, and other qualified organizations. For details and specific discount information, contact the special sales department at Jones & Bartlett Learning via the above contact information or send an email to specialsales@jblearning.com. Copyright © 2011 by Jones & Bartlett Learning, LLC All rights reserved. No part of the material protected by this copyright may be reproduced or utilized in any form, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the copyright......

Words: 182687 - Pages: 731

Managing Credit Risk

...Managing Credit Risk Click Link Below To Buy: http://hwcampus.com/shop/managing-credit-risk/ Through Embedded Intelligence in On-line Transaction Processing: First Union National Bank, Charlotte, NC1 THE ORGANIZATION First Union National Bank (FUNB) is the nation’s sixth largest banking company with $9.3 billion in total stockholders' equity and $17.2 billion in market capitalization. FUNB offers a diverse array of products such as 401(k) plans, checking and savings accounts tailored to customer needs, investment banking, certificates of deposit, mutual funds, credit cards and other loan products. FUNB has presence in 12 eastern states and Washington, DC It recently acquired of First Fidelity Bancorporation on January 1, 1996, giving it a customer base of about 12 million customers from Connecticut to Florida. On June 30, 1996, FUNB had assets of $139.9 billion. The bank’s network has 1,981 offices -the nation's largest branch banking system. It also has the nation's fifth largest automated teller machine network. In addition, First Union is pioneering one of the first direct banks on the Internet. Over the years, FUNB has been working towards developing a leading position in several markets, including deposits and credit cards, on the assumption that scale is an essential element of keeping unit costs low. First Union has the leading deposit share in its home state of North Carolina; it ranks second in Florida, New Jersey and the Washington,......

Words: 2019 - Pages: 9

Managing Credit Risk

...Managing Credit Risk Click Link Below To Buy: http://hwcampus.com/shop/managing-credit-risk/ Through Embedded Intelligence in On-line Transaction Processing: First Union National Bank, Charlotte, NC1 THE ORGANIZATION First Union National Bank (FUNB) is the nation’s sixth largest banking company with $9.3 billion in total stockholders' equity and $17.2 billion in market capitalization. FUNB offers a diverse array of products such as 401(k) plans, checking and savings accounts tailored to customer needs, investment banking, certificates of deposit, mutual funds, credit cards and other loan products. FUNB has presence in 12 eastern states and Washington, DC It recently acquired of First Fidelity Bancorporation on January 1, 1996, giving it a customer base of about 12 million customers from Connecticut to Florida. On June 30, 1996, FUNB had assets of $139.9 billion. The bank’s network has 1,981 offices -the nation's largest branch banking system. It also has the nation's fifth largest automated teller machine network. In addition, First Union is pioneering one of the first direct banks on the Internet. Over the years, FUNB has been working towards developing a leading position in several markets, including deposits and credit cards, on the assumption that scale is an essential element of keeping unit costs low. First Union has the leading deposit share in its home state of North Carolina; it ranks second in Florida, New Jersey and the Washington,......

Words: 2019 - Pages: 9

Managing Risk

...Managing Risk: A New Framework By: Robert S.Kaplan and Anette Mikes When Tony Hayward became CEO of BP, in 2007, he vowed to make safety his top priority. Among the new rules he instituted were the requirements that all employees use lids on coffee cups while walking and refrain from texting while driving. Three years later, on Hayward’s watch, the Deepwater Horizon oil rig exploded in the Gulf of Mexico, causing one of the worst man-made disasters in history. A U.S. investigation commission attributed the disaster to management failures that crippled “the ability of individuals involved identifying the risks they faced and to properly evaluate, communicate, and address them.” Hayward’s story reflects a common problem. Despite all the rhetoric and money invested in it, risk management is too often treated as a compliance issue that can be solved by drawing up lots of rules and making sure that all employees follow them. Many such rules, of course, are sensible and do reduce some risks that could severely damage a company. But rules-based risk management will not diminish either the likelihood or the impact of a disaster such as Deepwater Horizon, just as it did not prevent the failure of many financial institutions during the 2007–2008 credit crisis. In this article, we present a new categorization of risk that allows executives to tell which risks can be managed through a rules-based model and which require alternative approaches. We examine the individual and......

Words: 1456 - Pages: 6