Mastering Risk Management

INTRODUCTION

Many people would suggest that modelling of risk data, particularly non-financial data, is a step too far. After all, wasn’t that one of the major reasons that the world suffered the 2008 financial crisis? However, if modelling is treated as another tool with its own drawbacks and assumptions as well as benefits and advantages there is much to be gained from modelling risk management data. Using the data that we have created from risk and control self-assessments (RCSAs) and from capturing events we can challenge many of the assumptions that we make in running our businesses. We explore the benefits, as well as the disadvantages, of modelling in this chapter.