About the review
Effective risk management is vital for identifying and mitigating risks that could undermine the stability of deposit takers and the broader financial system. This high-level review will focus on fundamental aspects that are necessary for effective risk management within an entity.
It will look to understand the policies, processes and practices of deposit takers in relation to:
- risk governance and oversight
- risk management frameworks
- the risk management function.
Given the review's exploratory nature, we do not intend to examine an entity's approach for managing its individual material risks, or its risk culture.
Objectives
The primary objectives of this thematic are to:
- understand and gain insights into the practices of deposit takers in relation to their risk management framework
- uplift risk management capability across the sector by sharing good practices and highlighting areas for improvement
- provide input into the development of guidance to support the risk management standard that will be issued under the Deposit Takers Act 2023 (DTA).
Approach
We will undertake a desk-based review of entity specific information that is available internally and relevant documentation requested from participating entities. This will be followed by a period of engagement with these entities, involving interviews with relevant staff and board members to discuss their risk management practices.
Sample
The sample for the review includes nine entities from across the deposit taking sector. It represents a mix of banks and non-bank deposit takers of various sizes and nature of business. We intend to keep the sample confidential.
Reporting
We will use the insights and analysis from our desk-based review and engagement to:
- provide feedback letters to participating entities that will outline entity-specific good practices, areas for improvement, and recommended actions
- publish a public report on key findings, examples of good practices and industry recommendations without identifying specific entities.
Timeline
The thematic review is planned to be completed in December 2025.