According to the Project Management Institute,

projects with a sound risk process can expect a

15% higher success rate than standard projects:

I.

17% increase in cost efficiency

II. 15% increase in schedule efficiency

III. A single averted risk can pay for all risk
management activity for that project

BENEFITS
Any organization that effectively manages risk will experience significant
benefits throughout a number of areas, including:
Improved strategic and business planning
More effective use of resources
Increased ability to deliver on time
Reduced costs by limiting legal action or preventing breakages
Improved reliability leading to an enhanced reputation
An ability to quickly grasp new opportunities
Fewer breakdowns, shocks and unwelcome surprises
Enhanced communication between Business Units and
Departments
The ability to reassure key stakeholders throughout the
organization
The promotion of continuous improvement
A more focused internal audit programme

Busine
ss Risk

Moral
Hazard

System
ic Risk

Types
of
Bank
Risks

Operatio
nal Risk

Credit
Risk

Liquidi
ty Risk

Market
Risk
Reputatio
nal Risk

Major
Risks
Other Significant
Risks
Unrelated
Risks

Types of Bank Risks

Liquidity Risk occurs because while bills are mostly predictable, both in timing
and amount, customer demands for funds are highly unpredictable, especially
demand deposits (checking accounts).
Credit default riskoccurs when a borrower cannot repay the loan.
Operational riskarises from faulty business practices or when buildings,
equipment, and other property required to run the business are damaged or
destroyed.
Market risk is the risk of movement in the price function of financial instruments,
resulting in the loss/gain in value. The risk occurs in two separate forms;
-Systematic market
-Unsystematic risk

 Reputational risk is the risk of damage to a banks image and public

standing that occurs due to some dubious actions taken by the bank.
Business risk is the risk arisingfrom a bankslong-term business
strategy.
Systemic risk is the type of scenario that happened in 2008 across
the world. Broadly, it refers to the risk that the entire financial system
might come to a standstill.
Moral hazard refers to a situation where a person, a group (or
persons), or an organization is likely to have a tendency or a
willingness to take a high-level risk, even if its economically unsound.