This applies in any sector of the financial services industry where job roles involve risk management.

ELEMENT

PERFORMANCE CRITERIA

1. Develop risk evaluation criteria

1.1. Risks are identified in organisation processes and procedures

1.2. Risk evaluation criteria, including tolerance levels, are developed

2. Assess current exposure

2.1. Appropriate risk assessment tools are identified and applied and probability of risk established

2.2. Potential severity and/or impact of each consequence of risk is identified

2.3. Mitigating effect of existing controls is identified and exposure to risk assessed using evaluation criteria

3. Compare exposure with guidelines

3.1. Relevant guidelines are identified and risk exposure levels compared with organisational guidelines

3.2. Exposure levels are compared with industry and statutory obligations with unacceptable residual risks identified and reported

4. Prepare a probability assessment

4.1. Specific issues are analysed using measurement criteria

4.2. A risk map is prepared that ranks and summarises threats and risk issues in a consistent manner

5. Communicate with relevant internal and external stakeholders

5.1. Stakeholders are identified and their views sought

5.2. Information is provided to stakeholders at each stage of assessing the organisation's exposure to risks

Required skills

well-developed communication skills to:

determine and confirm organisation risk situation with internal and external stakeholders, using questioning and active listening as required

liaise with others, share information, listen and understand

use language and concepts appropriate to cultural differences

risk assessment and management skills

numeracy and IT skills to make financial calculations and use word processors, spreadsheets, databases and internet information

literacy skills for analysingrisk information to ensure appropriateness to the organisation

problem solving skills to assessrisk issues that have the potential to impact on organisation and to develop options to resolve these issues when they arise

organisational skills, including the ability to plan and sequence work

Required knowledge

Australian Standard 4360 Risk Management

organisation policies, procedures and operational guidelines

principles of risk management

The Evidence Guide provides advice on assessment and must be read in conjunction with the performance criteria, required skills and knowledge, range statement and the Assessment Guidelines for the Training Package.

Overview of assessment

Critical aspects for assessment and evidence required to demonstrate competency in this unit

Evidence of the ability to:

apply risk management principles and practices

effectively analyse financial risk situations

evaluate risk consequences and develop recommendations for mitigation.

Context of and specific resources for assessment

Assessment must ensure:

competency is demonstrated in the context of the financial services work environment and conditions specified in the range statement either in a relevant workplace or a closely simulated work environment

access to and the use of a range of common office equipment, technology, software and consumables

access to Australian Standard 4360 Risk Management.

Method of assessment

A range of assessment methods should be used to assess practical skills and knowledge. The following examples, in combination, are appropriate for this unit:

evaluating an integrated activity which combines the elements of competency for the unit or a cluster of related units of competency

verbal or written questioning on underpinning knowledge and skills

setting and reviewing business simulations or scenarios

accessing and validating third party reports.

Guidance information for assessment

The range statement relates to the unit of competency as a whole. It allows for different work environments and situations that may affect performance. Bold italicised wording, if used in the performance criteria, is detailed below. Essential operating conditions that may be present with training and assessment (depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts) may also be included.

Criteria may be defined in:

financial terms

non-financial terms which may impact on:

reputation

personal suffering

environmental degradation

loss of reputation or image.

Probability refers to:

the likelihood of the particular event or issue crystallising.

Impact refers to:

the scale of the effect on statutory objectives if the issue or event crystallises.

Consequences refer to:

areas of impact might include:

people

environment

business cessation

the impact of occurrence.

Mitigation refers to:

any of a range of activities which will reduce the likelihood or consequences of the risk and may include:

application of the hierarchy of control for physical hazards

hedging for currency exchange risks

insurance for business risks.

Controls are:

measures which limit the impact of risks.

Exposure to risk assessed is based on:

consequences

likelihood

mitigating effects.

Ranking of risk is according to:

exposure level

likelihood of occurrence

consequences

severity

management priorities and policies.

Stakeholders are:

internal to the organisation who have an interest in the function under consideration, including:

those providing services

policy makers

those receiving services from this organisation

external to the organisation who have an interest the organisation under being assessed, including:

suppliers

customers

regulators

shareholders.

Unit sector

Risk management

This unit contains employability skills.