Risk assessment and management system

DETAILED DESCRIPTION In accordance with the invention, a business risk assessment and management reporting method is provided which includes identifying a series of predetermined risk factors associated with the operation of a business such as a bank, evaluating each risk factor to determine risk level values for each risk factor, determining the actual risk level for each of the risk factors and generating a risk management report having visual indicates displayed with each risk factor.
It is an object of the invention to provide a method of evaluating a business using a time-fixed snapshot report of risk factors.
It is a further object of the invention to provide a mechanism for centralizing and automating reporting of the risks associated with a business to allow more accurate evaluation of the business risk versus reward equation.
Another object of the invention is to provide a method whereby management personnel can set criteria for risk factors determined to be important to operating a business and then quickly evaluate the business based on the criteria.
The risk factors are all quantified with a measurable characteristic.
In accordance with a preferred embodiment of the method of the invention, three ranges of risk level values—danger, caution and normal risk level—are selected for each of the chosen risk factors.
The ranges for each risk factor are determined based on management's perception of what values are acceptable for each factor for the normal range, how large a warning range is desired for the caution range for each factor and at what point the measured value of the risk factor indicates a danger to the business operation.
As used herein, management is intended to include the owner of a business, the Board of Directors of a corporate type entity, executive officers of a company and other management level personnel charged with operation of one or more business units of a company.
The ranges may be selected by upper management personnel or by operating managers who may be closer to day-to-day considerations which cause fluctuations in risk that have been identified for evaluation