Since 2012, close to 700 on-site engagements took place in credit unions. The risk areas covered include strategy and business model, governance, risk management and operational risks. The report analyses the 955 individual risk issues, sets out evidence-based findings on key risk areas and related supervisory expectations for credit unions. It can support credit union boards and management teams in developing and embedding their governance, risk management and operational frameworks.
Registrar of Credit Unions Patrick Casey said “Governance, risk management and operational capabilities are a credit union’s core foundations. Through supervisory engagement, credit unions are required to manage risks in a systematic and structured fashion. Our goal is to ensure all credit unions have an appropriate risk governance culture with a strong awareness and understanding of the impact of unmanaged risk. It is now timely to publish commentary on the frequency and nature of risks identified in on-site engagements. Whilst governance standards have improved across the sector, governance remains one of the key risk areas for credit unions. It is concerning that over 60% of individual risks identified during on-site engagements relate to governance or operational risks.”
“For many credit unions attention has now turned to business model development. In considering any new business initiatives, it is important that each credit union works within its own risk appetite and tolerances and its operational capabilities. Strengthening of core foundations is critical to credit unions in considering new business initiatives.”