EastWest Bank Management Development Program MODULE 5: Risk Monitoring PDF

EastWest Bank Management Development Program MODULE 5: RISK MONITORING Atty. Mara Villegas Agenda A. Risk Management Information System Introduction to B. Risk Management Risk Monitoring Communication Guidelines...

EastWest Bank Management Development Program MODULE 5: RISK MONITORING Atty. Mara Villegas Agenda A. Risk Management Information System Introduction to B. Risk Management Risk Monitoring Communication Guidelines C. Data for Stakeholders D. Methods in Horizon Scanning Icebreaker Risk Response Simulation: Safeguarding the Bank Objective To enhance understanding of identifying, monitoring, and controlling risks in a banking environment by applying practical scenarios. Icebreaker Risk Response Simulation: Safeguarding the Bank Instructions Class will be divided into groups of 3-4 Each group will be assigned scenarios based on the different types of risks banks face Identify the specific risk. Propose monitoring metrics and early warning indicators. Develop a detailed control and mitigation strategy. Outline an escalation and communication plan. Icebreaker Risk Response Simulation: Safeguarding the Bank Scenario #1: Cybersecurity Risk A phishing attack successfully compromises an employee’s credentials, giving hackers access to sensitive customer data, including account numbers and transaction history. Key Questions How will you detect and monitor such breaches? What steps should be taken to control the risk and prevent further damage? How will you handle communication with customers and regulatory agencies? Icebreaker Risk Response Simulation: Safeguarding the Bank Scenario #2: Credit Risk The bank observes a 20% increase in non-performing loans (NPLs) within its small business loan portfolio, attributed to an economic slowdown. Key Questions What metrics can help monitor this risk early? What policies or strategies can be implemented to mitigate the impact of NPLs? How will you balance customer retention with risk management? Icebreaker Risk Response Simulation: Safeguarding the Bank Scenario #3: Market Risk A sudden hike in interest rates leads to a significant drop in the value of the bank’s fixed-income investment portfolio. Key Questions How should this risk be monitored on a daily/weekly basis? What risk control measures should be in place to minimize the impact? How would you revise your investment strategies in response? Icebreaker Risk Response Simulation: Safeguarding the Bank Scenario #4: Operational Risk A critical system outage occurs in the bank’s online transaction platform, resulting in delayed payments and frustrated customers. Key Questions What indicators should have flagged this risk in advance? How will you manage customer relations and minimize reputational damage? What long-term controls should be implemented to avoid recurrence? Icebreaker Risk Response Simulation: Safeguarding the Bank Scenario #5: Regulatory or Compliance Risk The central bank issues new anti-money laundering (AML) guidelines, requiring significant updates to the bank’s reporting and monitoring systems. However, your current systems are outdated. Key Questions How will you monitor compliance with the new guidelines? What steps are needed to align internal systems with regulatory requirements? How will you address potential penalties or fines during the transition period? Icebreaker Risk Response Simulation: Safeguarding the Bank Scenario #6: Fraud Risk A sharp rise in fraudulent credit card transactions is noticed, particularly originating from a specific region. Investigations suggest internal collusion. Key Questions What measures should be taken to monitor and detect fraudulent activity? How will you investigate and address potential internal threats? What systems or controls can be implemented to reduce fraud exposure? Icebreaker Risk Response Simulation: Safeguarding the Bank Risk Identification Describe the Risk: What is the risk? What are its potential causes? What could be the impact on the bank (e.g., financial, operational, reputational)? Risk Monitoring Key Metrics to Monitor: What metrics or indicators will you track to detect the risk early? How frequently should these metrics be monitored (e.g., daily, weekly, monthly)? Tools and Systems: What systems, software, or tools will be used to monitor this risk? Icebreaker Risk Response Simulation: Safeguarding the Bank Risk Mitigation and Control Proposed Mitigation Strategies: What immediate actions will you take to address the risk? What policies or procedures need to be implemented or updated? Preventive Controls: What measures will you put in place to prevent this risk from occurring? How will you ensure adherence to these controls? Contingency Plan: If the risk escalates, what backup plan will you execute? Icebreaker Risk Response Simulation: Safeguarding the Bank Escalation and Escalation Protocol: Communication Plan Who needs to be informed (internal teams, senior management, regulators, etc.)? What is the timeline for escalation? Customer Communication (if applicable): What will be communicated to customers, and through which channels? Lessons Learned and Long- What will you do to ensure this risk is managed more effectively in the Term Measure future? Improvements in systems or training? Regular audits or simulations? Icebreaker Risk Response Simulation: Safeguarding the Bank Team Member Roles Who is responsible for each aspect of the response?  Risk Management Information System Risk Management Information System What is an RMIS? A Risk Management Information System (RMIS) is a crucial tool for organizations in today’s rapidly evolving business landscape. It is a comprehensive software solution designed to collect, analyze, and manage data related to risks and insurance within an organization. The importance of real-time information in an RMIS cannot be overstated, as it enables organizations to make informed and timely decisions in response to potential risks, thereby mitigating potential threats and maximizing opportunities. RMIS can easily pinpoint gaps and potential pitfalls before any financial impact. Risk Management Information System by RiskLogic Risk Management Information System Risk Management Information System by RiskLogic Risk Management Information System Purpose of RMIS Record details of risks that occur within the controls and priorities of the bank, as well as any changes Record risk treatments and related resource requirements Record details of incidents, loss events, and lessons learned Track accountability for risks, controls and treatments Track progress and record the completion of risk treatment actions Allow progress checks against the risk management plan Trigger monitoring and assurance activity Risk Management System by Anojan Kanagarathnam Risk Management Information System Physical risks Technical risks Political risks Legal & Contractual risks Expecting Economic/Financial risks Marketing risks Risk Management risks Environmental risks Schedule risks Operational Performance risks Risk Management System by Anojan Kanagarathnam  Risk Management Information System Propose Risk Management Source and Environment Management Innovative concepts Take precautions to Perfect funding Create situation for the face environmental employers to work resources The aesthetic Apply the effective issues appearance according to Complete tasks constructive Contingency for the the clients’ objective according to the working technology Effectively use the economic changes schedule resources Design Economic Output Risk Management System by Anojan Kanagarathnam Risk Management Information System Risk Management Performance System Risk management and performance measurement should be linked in order to: Supply chain partners Define and guide the overall risk profile Shape strategic direction Risk Management System by Anojan Kanagarathnam Risk Management Information System Awareness Make the risk management team aware of the risks that will occur during & after the amendments Make the stakeholders aware of the risks and requirements of the risk management process being implemented Risk Management System by Anojan Kanagarathnam Risk Management Information System Skills Empower the stakeholders with the skills that are required in risk management Through these skills, stakeholders can take steps in order to minimize or neutralize risks Afterwards, identify the skills of the personnel who are indirectly connected with the project and make use of them Risk Management System by Anojan Kanagarathnam Risk Management Information System Culture Every step that is taken in the risk management process should be in accordance with the culture of the bank Considerations such as: It should be in accordance with its mission and vision None of the stakeholders should feel uncomfortable with the process Risk Management System by Anojan Kanagarathnam Risk Management Information System Process Determine whether the process used for risk management is in accordance with the contractual, procurement and management practices of the bank (to prevent legal issues) Risk Management System by Anojan Kanagarathnam Risk Management Information System Confidence Consider how confident the project stakeholders are with risk management Gather feedback from each stakeholder and incorporate their ideas into the proposed risk management system Risk Management System by Anojan Kanagarathnam Risk Management Information System Applications After implementing the risk management system, observe its effectivity on the day-to-day operations of the bank Risk Management System by Anojan Kanagarathnam Risk Management Information System Risk Review The Group Risk Manager manages the risk process, including the rollout of the risk management program (audits risk periodically) Project Risk Management Project Risk Management follows a similar process to Corporate Risk Management The Project Manager takes responsibility for risk management Risk Management System by Anojan Kanagarathnam Risk Management Information System Analyzing the Risk Management System Determine whether the system actually minimized risk and maximized efficiency How the system complied with the bank’s operations What solutions were employed to manage the risk Any amendments and improvements for the system Risk Management System by Anojan Kanagarathnam Risk Management Information System Analyzing the Risk Management System (cont.) Changes Do some risks need to be given more priority? Is there anything about the management process that needs to be modified? New Risks What are emerging risks that need to be monitored? What are the necessary implementations to deal with said risks? Risk Management System by Anojan Kanagarathnam Risk Management Information System Recording the Monitoring Process Record details from the Risk Monitoring process for easy reference and replicability’s sake Useful for spotting defects in the system and preparing for future risks Risk Management System by Anojan Kanagarathnam  Risk Management Communication Guidelines Risk Management Communication Guidelines The audience plays a dynamic role in risk communication “An open two-way The subject exchange of information experts and opinion about risk, leading to better understanding and better risk management decisions” The lay public US Department of Agriculture, 1992 What is Risk Communication by Rusty Cawley, APR Risk Management Communication Guidelines Risk communication is different from all other models Traditional Communication Risk Communication Traditional Communication “We tell them” Fosters multi-directional Controls flow of information conversations “Who says what to whom via Takes risk perception into account which channel with what effect?” Supports the response Assumes “misinterpretation” is the Works before, during, and after a result of “noise” crisis Empowers its public What is Risk Communication by Rusty Cawley, APR Risk Management Communication Guidelines In a crisis, traditional models may increase risk by increasing outrage However, risk communication: Takes into account the emotional response to the hazard Empowers stakeholders to make informed decisions Encourages constructive actions and dissuades destructive actions What is Risk Communication by Rusty Cawley, APR Risk Management Communication Guidelines How to integrate risk communication with your company’s culture Know your stakeholders Make them partners in managing risk Foster two-way communication Listen to feedback Assess your relationships frequently Analyze: “What have we learned?” What is Risk Communication by Rusty Cawley, APR Risk Management Communication Guidelines What’s your return on investment in risk communication? More support for your plans Increased goodwill Better relations with decision makers Fewer injuries, illnesses and deaths Fewer wasted resources Fewer and less damaging rumors What is Risk Communication by Rusty Cawley, APR Risk Management Communication Guidelines Consideration Question to ask Support materials/information Identifying our audience Who are our stakeholders and Board audience (internal/external) for CEO communications? People leaders Project team(s) Risk Champions All staff Specific department or division Frequency Frequency How often should messages be sent? What’ll be the most beneficial frequency to issue communications? Find clear air: what other corporate messaging campaigns are happening? Approvals Who needs to approve CEO communications before they are People leaders distributed? Risk management communication plan by Victorian Managed Insurance Authority (VMIA) Risk Management Communication Guidelines Consideration Question to ask Support materials/information Presenting the plan What’s our style of presenting information? What level of detail do we need in a communication plan? Choosing how we’ll communicate What is our risk management Social media / newsletter communication approach? Email What types of communication do we Regular risk reports produced for the need to include? executive, board, projects teams or other stakeholders Periodic risk identification / awareness workshops Articles included in intranet, emails etc Presenting at key forums Risk management messages in annual report Delivering training including induction / orientation programs Risk management communication plan by Victorian Managed Insurance Authority (VMIA) Risk Management Communication Guidelines Risk Management Communication Plan (internal) Stake- Purpose Message/ Channel/ Timing/ Frequency Prepared Sent by Status holders content method date by Board CEO People leaders Risk Champions All staff Specific depts./ divisions Risk management communication plan by Victorian Managed Insurance Authority (VMIA)  Risk Management Communication Guidelines Risk Management Communication Plan (external) Stake- Purpose Message/ Channel/ Timing/ Frequency Prepared by Sent by Status holders content method date Clients Business partners/ suppliers Other departments Other institutions Ministers Community organizations Media Risk management communication plan by Victorian Managed Insurance Authority (VMIA) Data for Stakeholders  A. Why Storytelling with Data Matters Data for B. What is Data Visualization? C. Chart Types and When to Stakeholders Use Them D. Summary of Charts by their Purpose Data for Stakeholders Why storytelling with data matters Data visualization is transforming complex data into information which is easier to understand Data visualizations are created to answer “what” questions, but they don’t explain the “why”, or provide other contextual information to find that reason Data Story Telling links the visualization with a narrative to answer the “why” question, and conveys credible and compelling insights that is actionable by the decision makers Data Story Telling connects the visualization and narration/insights to the audience to make data-driven decision Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders Why storytelling with data matters “The narrative is the key vehicle to convey insights, and the visualizations are important proof points to back up the narrative.” Ryan Fuller, general manager at Microsoft and former CEO Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders Keys to Storytelling with Data Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders 1. Identify your story 2. Collect your data 3. Be aware of your audience Steps of Storytelling 4. Transform data to data with Data visualization 5. Generate your insights/narration Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders Steps of storytelling with data (Identify your story) What question are you trying to answer? Context/the current situation Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders Steps of storytelling with data (Collect your data) What data is most important What am I trying to achieve with the data? Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders Steps of storytelling with data (Be aware of your audience) Who are my audience? What are the most important points you want to focus on? What level of data will they likely expect or appreciate? Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders Steps of storytelling with data (Transform the data to data visualization) How you want to present the data: charts, graphs; to answer the question? Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders Steps of storytelling with data (Generate your insights/narration) Answer the “WHY” question of your visualization What is the one thing I want my audience to know or do with my data? Conclude with actions to take Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders What is Data Visualization? Data visualization is the presentation of data in a graphical format It is transforming complex data into meaningful information. Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders What is Data Visualization? Why is data visualization important? Data visualizations highlight patterns and trends in data and gives the reader quick insights Data visualization are easier to understand than text-based narrative or numbers Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders Principle of developing effective data visualization Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders Chart types & When to Use 1. Line chart 2. Bar chart 3. Stacked bar chart 4. 100% stacked bar chart 5. Pie chart 6. Areal chart 7. Combinations chart 8. Scatter chart Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders Line chart Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders Bar Chart Used to show comparison among categories Do not use 3D format to avoid unnecessary noise Horizontal Bar Chart Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders Bar Chart Vertical Bar Chart Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders Stacked Bar Chart Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders 100% Stacked Bar Chart Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders Pie & Doughnut Chart Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders Areal Chart Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders Heat Map Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders Combination/Combo Chart Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders Scatter Plot Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders Summary of Quantitative Data Visualization Storytelling with Data and Data Visualization by Frehiwot Mulugeta Data for Stakeholders What is PESTLE Analysis? (Free Template) by Jim Makos Data for Stakeholders The Flow of Goods and Services (Macroeconomic Indicators) A simple economic model illustrating the flow of goods and services through the economy. In the model, producers are termed as “firms” while consumers are referred to as “households.” Firms supply goods and services while households consume these goods and services. Factors of production (land, labor, capital) are supplied by the household to firms and the firms convert these into finished products for household consumption. Macroeconomic Indicators by Kamylle Galo Data for Stakeholders Indicators of Country’s Aggregate Output (Macroeconomic Indicators) The Gross Domestic Product (GDP) is the godfather of the indicator world. As an aggregate measure of total economic production for a country, GDP represents the market value of all goods and services produced by the economy during the period measured, including personal consumption, government purchases, private inventories, paid-in construction costs and the foreign trade balance (exports are added, imports are subtracted). Macroeconomic Indicators by Kamylle Galo Data for Stakeholders The GDP is an extremely comprehensive and detailed report The GDP figures as reported to investors are already adjusted for inflation. In other words, if the gross GDP was calculated to be 6% than the previous year, but inflation measured 2% over the same period, GDP would be reported as 4%, or the net growth over the period These are those who insist that advanced economics should aim to have 0% inflation, or in other words, stable prices. The general consensus, however, is that a little inflation is actually a good thing. Macroeconomic Indicators by Kamylle Galo Data for Stakeholders The two aspects of the definition of GDP (Macroeconomic Indicators) Why do we use the market value? What do we mean by final goods? Macroeconomic Indicators by Kamylle Galo Data for Stakeholders GDP is presented using market value of production because the economy produces different types of goods which cannot be directly added to each other The use of market values provides GDP estimates that are easy for everyone to interpret The calculation of GDP only includes final goods. These goods are purchased not for the purpose of resale or producing other goods for further sale (i.e., intermediate goods) but for consumption. In the computation of GDP, the purchasing of intermediate goods is avoided in order to avoid double-counting. Macroeconomic Indicators by Kamylle Galo Data for Stakeholders Gross National Product (Macroeconomic Indicators) Also known as Gross National Income (GNI). Is another factor of output. GNP is calculated as the sum of GDP and the Net Factor Income Abroad (NFIA). NFIA, as applied to the Philippines, represents the difference between the earnings of Filipinos from activities overseas and the earnings of foreigners in the Philippines. Macroeconomic Indicators by Kamylle Galo Data for Stakeholders What is Benchmarking? (Competitive Benchmarking) Benchmarking is the process of improving performance by continuously identifying, understanding, and adapting outstanding practices found inside and outside the organization. Benchmarking & Competitive Analysis by Jayesh Dhanur Data for Stakeholders What is it to be benchmarked? (Competitive Benchmarking) Why are others better? How are others better? What can we learn? How can we learn? How can we become the best in our industry? Benchmarking & Competitive Analysis by Jayesh Dhanur Data for Stakeholders Why Benchmarking? (Competitive Benchmarking) Benchmarking is a more efficient way to make improvements. Benchmarking speeds up organization’s ability to make improvements. Benchmarking has the ability to bring your performance up as a whole significantly Learn from others’ experiences Benchmarking & Competitive Analysis by Jayesh Dhanur Data for Stakeholders Benchmarking Features (Competitive Benchmarking) Good impact on customer needs Helps in raising customer standard Strengthening the weakness Betterment in learning methodology Get inspiration from the pioneer Benchmarking & Competitive Analysis by Jayesh Dhanur Data for Stakeholders Three Major Advantages of Benchmarking (Competitive Benchmarking) Product and Process Improvement By implementing benchmarking activity, organizations can improve their operation process Time & Cost Reduction Bench marking is time and cost efficient because it involves imitation and adaptation rather than pure invitation Competitive Strategy By implementing benchmarking activity, organizations can improve then process Benchmarking & Competitive Analysis by Jayesh Dhanur Data for Stakeholders Disadvantages of Benchmarking (Competitive Benchmarking) What is best for someone else may not suit you Poorly defined benchmarks may lead to wasted effort and meaningless results Incorrect comparisons Reluctance to share information Benchmarking & Competitive Analysis by Jayesh Dhanur Data for Stakeholders Competitive Strategy (Competitive Benchmarking) Build core competencies that will help to sustain competitive advantage Access to variety of markets Perceived benefit of product of service will increase Product or service is hard to imitate Low-cost leader Target specific shift in strategy Entering new markets Developing new products To create a firm more adaptable to change Benchmarking & Competitive Analysis by Jayesh Dhanur Data for Stakeholders Business & Strategy (Performance, Risk, and Control Indicators) A business is driven by its mission and vision To achieve its vision and mission, a business must have a strategy The strategy helps to consolidate the necessary inputs to achieve the desired output Input > Business > Outputs Vision + Mission = Strategy Performance & Risk Management by Skynapse Data for Stakeholders Strategy Management (Performance, Risk, and Control Indicators) A strategy includes: Planning long-term goals Creating objectives to be achieved Identifying activities to meet objectives Establishing parameters & frequency for measurement of activities Establishing risk & frequency of measurement Measuring activities & risks periodically Performing re-alignment of activities Strategy is an ongoing process Strategy must be communicated clearly within the organization Performance & Risk Management by Skynapse Data for Stakeholders The Flow of Goods and Services (Performance, Risk, and Control Indicators) Domain/ Perspective Objectives Risk Matrix Action Plans Performance Performance Indicator Measurement Performance & Risk Management by Skynapse Data for Stakeholders User Structure (Performance, Risk, and Control Indicators) Performance & Risk Management by Skynapse Data for Stakeholders Setting up the Domain (Performance, Risk, and Control Indicators) A domain can be an area that is grouped to a specific subset of a strategy This may include: Divisions within the organization Cross-functional groups Geographic locations Balanced scorecard perspectives The objective of each grouping is: To ensure that each domain is given a specific strategy with the overall strategy To delegate the ownership of the woman to specific senior executives to manage Performance & Risk Management by Skynapse Data for Stakeholders The Flow of Goods and Services (Performance, Risk, and Control Indicators) An objective provides clear goals to be achieved to ensure that the strategy is being executed There can be more than one objective to support the strategy An objective is bound by: A set of guidelines, Assumptions & constraints Identified risks A specific time-period Performance & Risk Management by Skynapse Data for Stakeholders Setting up the Action Plans (Performance, Risk, and Control Indicators) An action plan provides a clear path towards achieving the objectives There can be more than one set of action plans to achieve the objectives An action plan is defined by: The outcomes of the plan The project manager responsible for executing and monitoring the plan The parameters by which the plan is to be measured A specific time of time period of plan execution The frequency of reporting of the plan’s progress Performance & Risk Management by Skynapse Data for Stakeholders Setting up Performance Indicators (Performance, Risk, and Control Indicators) An action plan without measurement is bound to fail Measurement includes constant monitoring of progress Measurement involves measuring only parameters that support the objectives Measurements are defined by: Setting up of benchmarks and baselines Setting up of targets to be achieved Setup of tolerance values indicated by traffic lights Periodic appraisal of progress and update of information Assignment of measurement activities to specialists. Performance & Risk Management by Skynapse Data for Stakeholders Setting Up Risk (Performance, Risk, and Control Indicators) All strategic objectives need to be constantly monitored for risks Risks need to be identified and updated on a regular basis Risks are measured in terms of a risk matrix Identified risks should indicate the causes and the potential impact Performance & Risk Management by Skynapse Data for Stakeholders Keeping Track (Performance, Risk, and Control Indicators) It is imperative that actions are frequently and closely measured to ensure they meet objectives A key component of keeping track is to have timely notifications to key stakeholders Notifications are sent by emails to key stakeholders Reminders are sent if no action is taken A window period is to be set to ensure all performance measures are gathered and update Performance & Risk Management by Skynapse Data for Stakeholders Monitoring vs. Evaluation (Entity, Business, Portfolio, and Process Level Monitoring) Attribute Monitoring Evaluation Main focus Collecting data on progress Assessing data at critical stages of the process Sense of completion Sense of progress Sense of achievement Time focus Present Past-Future Main question What is happening now to reach Have we achieved our goal? our goal? Attention level Details Big Picture Monitoring and Evaluation by Migom Doley Data for Stakeholders Monitoring vs. Evaluation (Entity, Business, Portfolio, and Process Level Monitoring) Attribute Monitoring Evaluation Inspires Motivation Creativity Periodicity Continuous throughout the Intermittent; at the beginning or end of whole process significant milestones Supports Implementation of a plan Designing the next planning cycle Skills required Management Leadership Output processing Progress indicators need to be Evaluation results need to be closely monitored by a few discussed, processed, and interpreted people by all stakeholders Monitoring and Evaluation by Migom Doley Data for Stakeholders Need or Purpose? (Entity, Business, Portfolio, and Process Level Monitoring) Problem identification and cause analysis Inform Monitoring and Goal and stakeholders evaluation objective setting Developing implementation plan Monitoring and Evaluation by Migom Doley Data for Stakeholders Guiding Principles (Entity, Business, Portfolio, and Process Level Monitoring) Focused and feasible Timely Useable Credible, valid, and reliable Sensitive Ethical Monitoring and Evaluation by Migom Doley Data for Stakeholders Who Needs and Uses M&E Information? (Entity, Business, Portfolio, and Process Level Monitoring) To improve program implementation Managers Donors To inform and improve Governments future programs Technocrats Donors Inform stakeholders Governments Communities Beneficiaries Monitoring and Evaluation by Migom Doley Data for Stakeholders Who Conducts M&E? (Entity, Business, Portfolio, and Process Level Monitoring) Program Stakeholders Beneficiary Implementer Monitoring and Evaluation by Migom Doley Data for Stakeholders What to Monitor? (Entity, Business, Portfolio, and Process Level Monitoring) Plan Is the program proceeding as per the plan? Compliance How well does the program implementation comply with the program plan? Budget To keep track of ongoing activities, supplies & equipment and money spent in relation to budget allocation Delivery Assessment of program delivery Monitoring and Evaluation by Migom Doley Data for Stakeholders How to Carry Out M&E (Entity, Business, Portfolio, and Process Level Monitoring) Program Framework: Analyze and systematically lay out program elements Identify key elements to monitor and evaluate Determine and describe the measures to be used for monitoring and evaluation Develop M&E Framework and action plans, including data collection and analysis, reporting and dissemination of findings Monitoring and Evaluation by Migom Doley Data for Stakeholders M&E Questions (Entity, Business, Portfolio, and Process Level Monitoring) What is being done? By whom? Target population? When? How much? How often? Additional outputs? Resources used? Monitoring and Evaluation by Migom Doley Data for Stakeholders Monitoring at Different Levels (Entity, Business, Portfolio, and Process Level Monitoring) Top level: ensuring achievement of impact and provision of inputs; major concern is to devise strategy and allocate resources Middle level: concerned with getting the desired output with the inputs utilized; need to exercise supervision, provide support, and take timely corrective action Lower level/operational level: supervise actual operations and to ensure that planned activities are being carried out as per schedule Monitoring and Evaluation by Migom Doley Data for Stakeholders Monitoring and Evaluation: Methods, Process (Performance, Risk, and Control Indicators) Input Outputs Outcomes Components (what Activities (what was Target groups Short-term (learning Long-term (ultimate was invested) done) (who was and action) impact) reached) Workshops Participants Awareness Improved health Staff Knowledge outcome Volunteers Meetings Patient Attitude Social Time Counselling Clients Skills Economic Money Facilitation Citizens Motivations Environmental Materials Assessments Actions Disease prevalence Equipment Training Behavior Recruitment Decisions Monitoring and Evaluation by Migom Doley Data for Stakeholders Entry Level Monitoring (Entity, Business, Portfolio, and Process Level Monitoring) Entity-level controls are policies, rules, procedures and standards of behavior that apply to members of the board of directors, senior company officers, top management, and rank-and-file employees. It’s a well-established fact that the behavior of upper management tends to “set the tone” for the subsequent behavior of everyone else down an organization's chain of command. This is why entity-level controls are often called “tone at the top controls.” Entry level controls by Knowledge Leader Data for Stakeholders Entry Level Monitoring (Entity, Business, Portfolio, and Process Level Monitoring) Direct Indirect Direct entity-level controls are those Indirect entity-level controls are that exist to prevent purposeful or broader in scope and pertain to inadvertent material misstatements things like internal communication, on financial statements, in legal employee interaction and other proceedings or through press aspects of business that affect the releases, and in interviews or overall atmosphere of a company. marketing material. Entry level controls by Knowledge Leader Data for Stakeholders Entry Level Monitoring (Entity, Business, Portfolio, and Process Level Monitoring) Examples Mission statement, Statement of values, Code of ethics, Code of conduct, Audit (testing) and audit reporting requirements, Employee handbook or rulebook, Training manuals, Internal complaint procedure, Continuing education requirements, Employee review process Entry level controls by Knowledge Leader Data for Stakeholders Business Level Monitoring (Entity, Business, Portfolio, and Process Level Monitoring) Business monitoring is the practice of tracking and analyzing the operations and performance of a business over a set period of time. To conduct proper monitoring, a business will: Create specific goals or key performance indicators (KPIs), both short- and long-term; Identify and implement the strategies needed to achieve those goals; Track and review the progress at regular intervals Business monitoring is a key aspect of effective operations, and one indicator of a business’ ongoing success. Enterprises that cannot set clear goals and routinely compare their performance against those goals are going to struggle to thrive in a competitive marketplace. Business Monitoring by enigma Data for Stakeholders Business Level Monitoring (Entity, Business, Portfolio, and Process Level Monitoring) EXAMPLES Process monitoring Process monitoring compares the performance of systems, strategies, and workflows to gauge efficiency and reduce or eliminate redundancies or inefficiencies. Performance monitoring Performance monitoring assesses overall performance in one or more business areas, including employee output. It shows a business where it is falling short in meeting its core business deliverables and highlights critical areas for improvement. Financial monitoring Financial monitoring tracks a company’s spending, comparing actual expenditures to predicted budgets. It identifies where cost overruns or wasteful spending has occurred, and works to minimize financial outlays. Business Monitoring by enigma Data for Stakeholders Business Level Monitoring (Entity, Business, Portfolio, and Process Level Monitoring) EXAMPLES Organizational monitoring Organizational monitoring looks at a company’s human capital and the way organizational teams are planned, developed, and structured. It involves reviewing the effectiveness of team communication and collaboration at all levels of a company. Progress tracking Progress tracking, also known as progress validation, focuses on the progress a company is making toward meeting its goals. It can allow stakeholders to stay updated on daily operations while tracking overall productivity. Business Monitoring by enigma Data for Stakeholders Portfolio Level Monitoring (Entity, Business, Portfolio, and Process Level Monitoring) Portfolio monitoring involves actively tracking a fund’s holdings and analyzing their performance across various aspects like finances, operations, and governance. What Is Portfolio Monitoring in Private Equity? by Allan Parks Data for Stakeholders Portfolio Level Monitoring (Entity, Business, Portfolio, and Process Level Monitoring) Financial performance This is one of the most critical components of monitoring portfolio monitoring. It involves assessing the financial health and performance of portfolio companies. That means tracking metrics like: Revenue Profit margins Cash flow Investment returns — using metrics like internal rate of return (IRR) and multiple on invested capital (MOIC) What Is Portfolio Monitoring in Private Equity? by Allan Parks Data for Stakeholders Portfolio Level Monitoring (Entity, Business, Portfolio, and Process Level Monitoring) Operational Operational performance monitoring is the other important performance component of portfolio monitoring. This evaluates how well the monitoring portfolio companies are running their businesses. That means tracking and assessing factors like: Production efficiency Market position or market share Employee productivity Customer satisfaction Turnover rates Customer acquisitions costs Sales growth What Is Portfolio Monitoring in Private Equity? by Allan Parks Data for Stakeholders Portfolio Level Monitoring (Entity, Business, Portfolio, and Process Level Monitoring) Risk Identification This component of portfolio monitoring assesses the portfolio governance practices and compliance with relevant laws and regulations. More specifically, it entails: Assessing a company’s corporate governance structures, procedures, and policies to make sure they are strong and effective and that they are based on established standards or best practices. Tracking adherence to industry-specific regulations and legal requirements, including securities laws, anti-corruption laws, labor laws, financial reporting standards, and even environmental regulations What Is Portfolio Monitoring in Private Equity? by Allan Parks Data for Stakeholders Portfolio Level Monitoring (Entity, Business, Portfolio, and Process Level Monitoring) Governance and This component of portfolio monitoring assesses the portfolio compliance governance practices and compliance with relevant laws and regulations. More specifically, it entails: Assessing a company’s corporate governance structures, procedures, and policies to make sure they are strong and effective and that they are based on established standards or best practices. Tracking adherence to industry-specific regulations and legal requirements, including securities laws, anti-corruption laws, labor laws, financial reporting standards, and even environmental regulations What Is Portfolio Monitoring in Private Equity? by Allan Parks Data for Stakeholders Process Level Monitoring (Entity, Business, Portfolio, and Process Level Monitoring) Process monitoring encompasses a range of activities aimed at improving the operational efficiency by tracking, analysing, and evaluating key processes within an organization. The Power of Process Monitoring by Djordje Djurica Data for Stakeholders Process Level Monitoring (Entity, Business, Portfolio, and Process Level Monitoring) Functional Monitoring Functional monitoring tracks and evaluates performance and adherence to functional requirements in a business process. It ensures data validation, rule enforcement, system integrations, and policy compliance. By continuously monitoring these aspects, organizations maintain process correctness, data integrity, and desired outcomes. Functional monitoring offers insights into process health and effectiveness, allowing prompt issue identification and resolution. The Power of Process Monitoring by Djordje Djurica Data for Stakeholders Process Level Monitoring (Entity, Business, Portfolio, and Process Level Monitoring) Technical Business Functional monitoring tracks and evaluates performance and Process Monitoring adherence to functional requirements in a business process. It ensures data validation, rule enforcement, system integrations, and policy compliance. By continuously monitoring these aspects, organizations maintain process correctness, data integrity, and desired outcomes. Functional monitoring offers insights into process health and effectiveness, allowing prompt issue identification and resolution. The Power of Process Monitoring by Djordje Djurica Data for Stakeholders Process Level Monitoring (Entity, Business, Portfolio, and Process Level Monitoring) Process Mining Process mining is an advanced form of process monitoring that uses data analysis to uncover insights from event logs. It visualizes actual process flows, deviations, patterns, and inefficiencies. Process mining identifies compliance issues and variations from intended process models. By integrating real- time and historical data, it facilitates process analysis, optimization, and redesign, promoting continuous improvement and operational excellence The Power of Process Monitoring by Djordje Djurica Data for Stakeholders Key Performance Indicators (Leading vs. Lagging Indicators) Key performance indicators (KPIs) are values that measure your organization’s success at meeting its objectives. KPIs provide insight into business conditions like: Predictability Early return on investment (ROI) Product quality Leading vs Lagging Indicators: What’s the Difference? by Stephen Watts Data for Stakeholders What are Leading and Lagging Indicators? (Leading vs. Lagging Indicators) Leading vs Lagging Indicators: What’s the Difference? by Stephen Watts Data for Stakeholders What are Leading Indicators? (Leading vs. Lagging Indicators) Leading indicators are sometimes described as inputs. A leading indicator encourages business stakeholders to ask: What processes can I employ to achieve this goal to higher levels of success? What skills can the team improve to better achieve the desired outcome? What steps can be taken to speed up product development? Leading vs Lagging Indicators: What’s the Difference? by Stephen Watts Data for Stakeholders What are Leading Indicators? (Leading vs. Lagging Indicators) Leading indicators do this by providing benchmarks that, if met, will be indicative of meeting overall KPIs and objectives. Some examples of leading indicators for an enterprise business software company with an annual subscription fee might be: Percent of customers that sign up for two-year agreements Number of customers that renew software at or before mid-term alerts Number of customers that purchase software add-ons Leading vs Lagging Indicators: What’s the Difference? by Stephen Watts Data for Stakeholders What are Leading Indicators? (Leading vs. Lagging Indicators) How to use leading indicators As mentioned, a leading indicator is a measure of where your business is going. For instance, if you stick to lagging measurements, like revenue, you may completely miss an important, but relatively small, segment of your market that is purchasing from another geographical location in which you don’t have a presence. Leading vs Lagging Indicators: What’s the Difference? by Stephen Watts Data for Stakeholders What are Leading Indicators? (Leading vs. Lagging Indicators) How to use leading indicators That’s where leading indicators enter the scene. By creating measurements like tracking individual purchases outside of certain zip codes or regions, you can learn where your company could potentially establish a new foothold. That’s an insight you can’t understand by looking at overall revenue alone. When you have a question that asks you to look into future growth and success, it’s the right time to use a leading indicator. Leading vs Lagging Indicators: What’s the Difference? by Stephen Watts Data for Stakeholders What are Lagging Indicators? (Leading vs. Lagging Indicators) How to use leading indicators A lagging indicator measures current production and performance. While a leading indicator is dynamic but difficult to measure, a lagging indicator is easy to measure but hard to change. They are opposites, and as such a lagging indicator is sometimes compared to an output metric. Leading vs Lagging Indicators: What’s the Difference? by Stephen Watts Data for Stakeholders What are Lagging Indicators? (Leading vs. Lagging Indicators) A lagging indicator encourages business stakeholders to ask: How many people attended an event? How much product was produced? What response did it receive? Leading vs Lagging Indicators: What’s the Difference? by Stephen Watts Data for Stakeholders What are Lagging Indicators? (Leading vs. Lagging Indicators) Lagging indicators measure output that’s already occurred to gain insight on future success. They do this by measuring things like: Profit Expenses Customer participation Renewal rates Revenue Leading vs Lagging Indicators: What’s the Difference? by Stephen Watts Data for Stakeholders What are Leading Indicators? (Leading vs. Lagging Indicators) How to use lagging indicators Lagging indicators are always triggered by an event that has just occurred, and, in that sense, are a little more self-explanatory than leading indicators. If you’re measuring the outcome of an event, product release, sales training program or what have you, you’re using lagging indicators to determine, in retrospect, who attended, what was produced, or how it was received by attendees. Lagging indicators are best used in conjunction with leading indicators to determine trends and if outcomes were met. This can be made simple with the right technology infrastructure that compares leading and lagging indicators, offering insight. Leading vs Lagging Indicators: What’s the Difference? by Stephen Watts Data for Stakeholders Goals of Incident Response (Incident Detection, Response, and Escalation) Confirm whether an incident occurred or not Minimizes disruption of business and network operation Promote accumulation of accurate information Project privacy rights established by law and policy Provide accurate reports and useful recommendations Allow criminal or civil actions against perpetrator(s) Protect your organization’s reputation and assets Educates senior management Incident Response Process by Bhupeshkumar Nanhe Data for Stakeholders Incident Prioritization (Incident Detection, Response, and Escalation) Incident Management by Slideteam Data for Stakeholders Incident Severity Level (Incident Detection, Response, and Escalation) Incident Management by Slideteam Data for Stakeholders Team Responsibility (Incident Detection, Response, and Escalation) Incident Management by Slideteam Data for Stakeholders Incident Management Communication Plan (Incident Detection, Response, and Escalation) Incident Management by Slideteam Data for Stakeholders Risk Matrix (Incident Detection, Response, and Escalation) Incident Management by Slideteam Data for Stakeholders Incident Management Process Flow (Incident Detection, Response, and Escalation) Incident Management by Slideteam Data for Stakeholders Plan in Action (Incident Detection, Response, and Escalation) Incident Management by Slideteam Data for Stakeholders Escalation Process (Incident Detection, Response, and Escalation) Incident Management by Slideteam Data for Stakeholders Time Guidelines (Incident Detection, Response, and Escalation) Incident Management by Slideteam Data for Stakeholders Incident Management Best Practices (Incident Detection, Response, and Escalation) Incident Management by Slideteam Methods in Horizon Scanning Methods in Horizon Scanning What is Horizon Scanning? Horizon scanning involves reading a range of materials (e.g. academic articles, news articles, blogs and early research reports) to identify signals of change. It can also involve stakeholder interviews and workshops. Different frameworks can be used for horizon scanning. For example, PESTLE and its variants can be used to identify signals of change across the five domains of Political, Economic, Societal, Technological, Legislative and Environment. These signals of change are generally collated, clustered into themes and relationships between them considered. This information provides a basis to consider and discuss with stakeholders how emerging trends may affect your policy area. Horizon Scanning by Department of the Prime Minister and Cabinet (NZ) Methods in Horizon Scanning Steps for Horizon Scanning Horizon Scanning by Department of the Prime Minister and Cabinet (NZ) Methods in Horizon Scanning Benefits of Horizon Scanning Identifies drivers of change so you can be prepared to respond. Helps to surface and test assumptions about the future. Horizon Scanning by Department of the Prime Minister and Cabinet (NZ) Methods in Horizon Scanning Limitations of Horizon Scanning Cognitive biases of individuals conducting horizon scanning may mean they don’t include important or insightful information. To add value, the information from the horizon scanning needs to be interpreted to identify what changes are likely to be important and make sense of how these changes may affect your policy area. Horizon Scanning by Department of the Prime Minister and Cabinet (NZ) Methods in Horizon Scanning Example of Horizon Scanning JP Morgan puts horizon scanning into practice when it has to make sense of economic indicators and geopolitical developments. In this way, with advanced analytics, the bank is better placed to proactively determine the movement of the markets and, therefore, advise clients on investment strategies. This way, JP Morgan manages to stay ahead of any turns that the economy may take and can sustain its competitive advantage. Real-World Examples of Horizon Scanning: How Businesses Stay Ahead by SGS Digicomply  EastWest Bank Management Development Program MODULE 5: RISK MONITORING Atty. Mara Villegas