Considering the rapid pace of inputs in the business environment and their fast volatility, this resulted in impacts on the risk management framework across global, regional and local economies. The State of Kuwait, as economic power, is not isolated from the global purview. In the private sector, private business entities are the key player, where they are subject to supervision of regulatory and / or supervisory bodies. In order for these entities to have adequate hedging in managing their business, they should be aware of the overall risk environment specific to the business segment in which they operate in order to be able to predict the risks that may arise and define a framework for addressing these risks and mitigating the effects thereof, and thus, maintain the going concern principle.
As an example of business risk profiling, Central Bank of Kuwait issued Circular No. (2/ ES/457/2020) dated 09 June 2020 to exchange companies. The requirements of such Circular include obligating exchange companies to develop a written study for business risk profiling related to money laundering and financing of terrorism, which should be updated every two years effective from 04 October 2020. This study is intended to provide the regulator with assurance that exchange companies recognize the risk universe associated with money laundering and financial of terrorism, and hedge against the same. The aforesaid CBK Circular defined the key components to be covered in the study.
What are the international standards governing the business risk profiling?
There are several accredited international risk management bodies, e.g. the UK-based Institute of Risk Management (IRM), where each body issues its own standards that govern the busines risk profiling. It is noteworthy that all these standards constitute best global practices. However, if the regulators’ instructions define specific requirements, then such instructions shall prevail over the international standards.
What is the importance of business risk profiling within business entities?
The importance of business risk profiling lies in enabling the identification and assessment of inherent risks as well as developing strategies for addressing them as and when they occur in order to mitigate any resulting implications, which would threaten the business continuity.
What is the added value from the business risk profiling to business entities?
Identification and assessment of inherent risks surrounding different business segments.
Compliance with laws, regulations, resolutions, and instructions issued by regulatory authorities
Enhance the stakeholders’ confidence in the business entity.
Why Baker Tilly to provide this service?
Baker Tilly is distinguished by specialist professional experience and offers the following characteristics carrying added values to our clients as follows:
A global consulting firm operating in the State of Kuwait
Baker Tilly’s local experience under international umbrella
Professional bilingual team with in-depth experience in providing risk management services
Baker Tilly’s experience in the matrix of regulatory instructions in the State of Kuwait related to business risk profiling
Other related Risk Management services offered by the Baker Tilly
Baker Tilly offers a set of other related risk management services as outlined below: