Risk management is definitely a key activity for companies and financial entities, simply because not doing so goes against the execution of the strategic plan.

Isn't it ideal to anticipate the iceberg before colliding with it? – Kattia Ramírez, CEO QF Nexus.

At QF we know that risk management entails CHALLENGES

Having enough and specialized personnel in the field.
Having access to technology that allows you to anticipate rather than react to the environment.
Making decisions in volatile and uncertain environments.
Modeling, quantifying, and managing emerging risks.
High operational recovery cost for realized risks.
Managing in an increasingly demanding and complex regulatory environment.
Executing the strategy with broad visibility of risks.

However, a robust risk management will help you to

1. Protect capital and preserve solvency:

Effective management makes it possible to identify, measure, and control risks, reducing potential losses, which protects shareholders' capital.

2. Achieve Regulatory Compliance:

Compliance with applicable laws and regulations by local and international regulators helps avoid costs associated with litigation, fines, and sanctions.

3. Strengthen trust and improve reputation:

A company or financial institution that demonstrates good risk management generates greater trust among its customers and in the market, which not only attracts investors but also strengthens its reputation with stakeholders.

4. Generate financial stability and foster resilience:

Controlling risks reduces exposure to disruptive events, minimizing volatility in financial results and increasing resilience to economic crises.

5. Improve decision-making:

Early identification of risks makes it possible to make informed strategic decisions based on data and analysis, which simultaneously allows you to prioritize and allocate resources more efficiently.

6. Seize opportunities:

Proper risk management allows you to identify and take advantage of situations that can generate benefits for the organization, including: detecting areas for improvement, anticipating trends, and fostering innovation.

At QF Nexus we are ready...

At QF Nexus, we are ready to support you in taking safe steps toward efficient and effective risk management so that you can focus on growing your business.

Simpler

We transform the complexity of risk management into clear vocabulary and easily understandable strategies that allow you to move forward with confidence in increasingly volatile and complex environments.

Smarter

We make risk management backed by vision, strategic integration, business knowledge, and proactivity, so that decision-making is timely, effective, and aligned with the strategy.

Better

We take your risk management to the next level with simple yet robust solutions that generate short-term value and are continuously improved through experience and the learning process.

A) CORPORATE GOVERNANCE
A.1) CONSULTING

Diagnosis, assessment, methodology development, and implementation of best practices regarding:

Independence and effectiveness of related bodies, as suggested by the Basel Principle on Corporate Governance.
Integration of a comprehensive risk management approach in decision-making processes.
Clear lines of defense structures, ensuring the effectiveness of internal audit, risk management, and compliance functions.
Internal control systems that contribute comprehensively to risk mitigation.
Corporate ethics programs and codes of conduct that foster a culture of compliance.
Strategies to align the values, behaviors, and objectives of personnel with corporate governance principles.
Metrics to evaluate the impact of culture on risk management and decision-making.

1

Identification:

Comprehensive risk mapping: Definition of the organization's most relevant risks (including emerging risks), establishing key indicators for each.
Environmental analysis: Evaluation of external factors such as regulatory changes, macroeconomic, and geopolitical risks that could impact the organization.
Assessment of critical processes: Detection of inherent risks in key processes through interviews, workshops, and document review.

2

Assessment

Development and implementation of assessment models: Creation of quantitative and qualitative models for each key risk.
Risk prioritization: Creation of risk matrices that classify and prioritize risks according to their relevance and criticality.
Sensitivity and scenario analysis: Evaluation of the organization's behavior under different stress conditions to understand how risks interact and affect its stability.

3

Limit Setting:

Advisory on defining risk appetite so that it is directly related to the organization's strategic objectives.
Support in defining the Risk Appetite Statement so that it includes quantitative, qualitative aspects, key risk indicators (KRIs), and limits to measure and control exposure levels.
Guidance to ensure the Risk Appetite Statement is integrated with the organization's culture.

4

Risk Treatment:

Design of internal controls: Development of policies, procedures, and specific controls to mitigate identified risks.
Risk transfer: Advisory on acquiring insurance, hedging strategies, and other tools to transfer risks.
Specific action plans: Implementation of strategies to reduce, accept, or eliminate risks based on the organization's priorities.

5

Contingency and Continuity Plans

Design of business continuity plans: Creation of protocols that ensure critical operations in case of interruptions.
Crisis response plans: Development of communication and crisis management strategies to mitigate reputational and operational impact.
Drills and stress tests: Practical exercises to assess the effectiveness of contingency plans and adjust them as needed.

6

Monitoring, Control, and Communication

Periodic reports to the Board of Directors: Design of clear and consistent reports to keep the Board informed about the evolution of the risk profile.
Review and updating of policies: Guidance so that risk management strategies continuously adapt to changes in the internal and external environment.

B.2) TECHNOLOGY

Technological tools for assessing traditional and non-traditional risks.
Applications that allow stress testing and extreme scenario analysis to evaluate the organization’s resilience.
Risk dashboards providing a view of key risk indicators (KRIs) and performance metrics (KPIs).
Early warning systems to identify patterns in financial behavior and issue automatic alerts to prevent incidents.
Automation of regulatory reports associated with risk management.

Design and Updating of Recovery Plans

Development of Recovery Indicators (RI): Creation of specific metrics to measure financial stability, liquidity, capitalization, and profitability, acting as early warning signals of deterioration.

Stress scenario simulation: Evaluation of plan effectiveness through stress testing and sensitivity analysis addressing hypothetical extreme stress situations.

Design of Resolution Plans

Identification of critical functions: Determining which operations and services must be maintained during a resolution to avoid impacts on the financial system.

Structuring resolution plans: Advising the organization on the development of resolution plans in accordance with regulations.

D) CAPITAL OPTIMIZATION

D.1) CONSULTING

Diagnosis of regulatory ratios: Assessment of compliance with metrics such as the Capital Adequacy Ratio (CAR), Patrimonial Sufficiency, and financial leverage, identifying possible gaps or surpluses, including stress scenarios.
Optimization of capital structure: Advising on the optimal composition of capital and its allocation in different lines.
Risk-weighted assets (RWA) management: Identification of opportunities to reduce RWA, improving capital efficiency without compromising the bank's risk profile.
Economic capital optimization: Implementation of models to determine how much capital the entity should hold against specific risks, such as credit, market, and operational.
Projections and stress scenarios: Modeling of different economic scenarios to foresee the evolution of capital and its capacity to absorb losses.
Capital planning: Design of strategic capital plans that align the institution’s objectives with regulatory requirements and profitability goals.

D.2) TECHNOLOGY

Implementation of technological systems to optimize capital management.
Development of systems that generate accurate and timely capital reports, aligned with local and international regulations.

Did you know that it is estimated that the marine world contains more than 500 thousand animal species? However, about 230 thousand species have been identified, and among them we share some curiosities:

Dolphin: Considered the most intelligent marine animal, demonstrated by problem-solving capacity, communication, and social learning.

Icelandic clam: This mollusk can live more than 500 years, as shown by the specimen called “Ming,” which is estimated to have been 507 years old when discovered.

Octopus: Considered the most resilient and strategic animal in the sea. It can change color and texture depending on the environment and can learn new skills quickly.

The marine world is an ideal scenario to exemplify that risk management must be intelligent, continuous, resilient, and strategic.