Annual Report 2016

Management’s Discussion and Analysis

Enterprise-Wide Risk Management

As a diversified financial services company actively providing banking, wealth management, capital market and insurance services, we are exposed to a variety of risks that are inherent in carrying out our business activities. A disciplined and integrated approach to managing risk is therefore fundamental to the success of our operations. Our risk management framework provides independent risk oversight across the enterprise and is essential to building competitive advantage.

Image of Surjit Rajpal

Surjit Rajpal
Chief Risk Officer
BMO Financial Group


Strengths and Value Drivers

  • Disciplined approach to risk-taking.
  • Comprehensive and consistent risk frameworks to address all material risk types.
  • Risk appetite and metrics integrated into strategic planning and the ongoing management of businesses and risks.
  • Sustained mindset of continuous improvement to drive consistency and efficiency in the management of risk.

Challenges

  • The heightened pace, volume and complexity of regulatory requirements.
  • Balancing risk and return in an uncertain economic and geopolitical environment.
  • The evolving technology improvements required to meet customer expectations and the need to anticipate and respond to cyber and competitive threats.

Priorities

  • Address increased complexity by streamlining risk management activities and by simplifying processes and implementing consistent practices across different business lines.
  • Support greater integration of risk considerations in business processes and decisions, while managing change and complexity through more dynamic assessment and monitoring of the risks.
  • Continue to enhance our risk management infrastructure through greater integration of our systems, data models and business and risk management processes to enhance the ongoing alignment of critical elements.

2016 Achievements

  • Improved risk data and risk reporting through significant investment in streamlined data collection, more timely data, greater data coverage, report automation and heightened governance.
  • Further enhanced stress testing and other data analysis and modelling.
  • Maintained our risk culture through enhanced assessment and learning tools and communication processes.
  • Responded to rising regulatory expectations, evidenced by improvements in stress testing, market risk measurement, anti-money laundering tools and processes and foundational risk management.
  • Continued to develop the next generation of our risk infrastructure by integrating, automating and upgrading foundational capabilities for risk and data analysis and modelling of market, credit and operational risks.
 

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