Outsourcing the Risk Management Function at Hvidbjerg Bank
"The collaboration with Advisense is efficient and valuable, and ensures that the basic setup of the risk management function is set according to current practices, which enables me to focus on the actual risks in the bank's core operations."
- Torben Bjørn-Strunge, CRO
Ensured Compliance
Risk Mitigation
Improved Operations
Actionable Recommendations
In 2020, Hvidbjerg Bank’s risk manager at the time was facing imminent retirement, so the bank investigated what options were available in the market to assist with a compliant risk management function. The choice ended up being an outsourcing solution, where Advisense would perform the ongoing monitoring of the function in the future.
Hvidbjerg Bank is built on values such as social responsibility, being a local and independent bank, forward-looking, decisive, persistent, trustworthy, accessible and sustainable. The bank serves many happy and loyal customers with products within housing, savings, investments, etc. and fulfils the needs of private and business customers in their daily finances. The bank is locally anchored with 65 employees at the headquarters in Hvidbjerg in Thyholm, with 4 branches in Viborg, Holstebro, Hurup and Struer.
The Challenge
Hvidbjerg Bank’s previous risk manager was retiring, leaving a gap in resources and competences and the bank was faced with re-evaluating the setup of its risk management function.In the foreseeable future, new financial regulations and executive orders would come into force, requiring specialised competencies.
The Danish FSA initiated a greater focus on the risk management area, so the ongoing preparation of a true and fair risk picture was an important parameter in the bank’s activity and recruiting a full-time employee for the risk management function could be difficult. The work content of the risk management function in the bank was potentially not suitable for a full-time position and there was an internal desire to rethink certain methods and processes, as well as improve quality in specific areas of specialisation
The Solution
The bank faced a resource-intensive task, which is why the bank chose to enter into a cooperation agreement with Advisense due to Advisense’s experience and competences with risk assessments, annual plans, controls, training, consulting, reporting, analyses, expertise on financial legislation, market standards and implementation of governance, processes and methods within the risk management function. Advisense assisted with design, set-up of proportional and risk-based governance structure and implementation of new risk management function.
Like all other financial organisations, the bank has an obligation to comply with applicable legislation in the areas of credit, liquidity, investment, operational risk, IT, capital, etc. which was set as a primary success criterion. The bank got a cost-effective solution that has reduced internal resource requirements and a common thread between risk assessment, annual cycle, controls, internal counselling and reporting. In parallel, Advisense has helped the bank with ongoing projects to adapt the business to new challenges, as well as sparring and input in general for the bank’s management
The Result
With Advisense as supplier to the risk management function, the bank has implemented a new and solid framework within the risk management function. Together with Advisense, the bank has ensured compliance with applicable legislation in relation to the bank’s activities, including documentation and execution of risk-based controls and reporting.
The bank has increased competences and resources to strengthen its current and future risk areas as required by financial legislation and dependency on key persons and internal conflicts of interest are reduced. In addition to an efficient and valuable collaboration with the compliance function, the solution has resulted in close co-operation with 1st line managers.
The agreement has given the bank access to deep market insights, industry benchmarks, trends and focus areas. Monitoring of financial regulation, with input and follow-up on solution recommendations was provided.
With an outsourcing solution from Advisense, we have strengthened our breadth, depth and competences in the risk management function. We have also established a good collaboration with line managers, which provides a dynamic and efficient risk environment so that risks are identified, monitored and reported accurately to senior management. This means that the bank is able to contribute to more accurate risk identification.
Torben Bjørn-Strunge, CRO, Hvidbjerg Bank