Risk Management

Managing risk is an integral part of our business strategy. Our risk management approach focuses on ensuring continued financial soundness and safeguarding the interests of our stakeholders, while remaining nimble to seize value-creating business opportunities in a fast-changing environment. We are committed to maintaining high standards of corporate governance, to upholding sound risk management principles and business practices to achieve sustainable long-term growth. We continuously strive towards best risk management practices to support our strategic objectives.

2016 Highlights

Ensuring Sustainable Growth Through Informed Risk Decision-Making Processes

In 2016, Group Risk Management established a dedicated Integrated Fraud Management unit to drive strategy and governance for fraud risk management across the Group. This unit works closely with business lines to strengthen their current practices across the five pillars of prevention, detection, response, remediation and reporting in fraud risk management. Using advanced data analytics and technology, it will implement proactive measures to deter fraud risks and to improve the overall effectiveness of fraud risk management across functions and geographies.

The Governance, Risk and Compliance system (GRC) covers operational risk event reporting and management risk awareness reporting, and in 2016, the GRC was expanded to include coverage of Key Risk and Control Self-Assessments, Key Operational Risk Indicators, Product Programme, Outsourcing Risk Management and Compliance Review on Anti-money Laundering. This GRC system is instrumental in helping UOB achieve automation and standardisation for all business and support units across all subsidiaries and branches. It also improves our business agility and competitive advantage across our franchise.

Meeting New Regulatory Requirements and Expectations

In 2016, we kick-started projects to address new regulatory requirements arising from Interest Rate Risk in the Banking Book and the Fundamental Review of the Trading Book. The projects cover system enhancements to be put in place to meet the new requirements by 2018 and 2019 respectively.

We recognise our role in driving sustainable business practices for financial stability through credit cycles. In 2016, we formulated our responsible financing policy to integrate environmental, social and governance (ESG) considerations into our credit evaluation and approval processes. Our policy has since been rolled out Group-wide, covering the eight high-risk sectors identified by The Association of Banks in Singapore. We also engaged non-governmental organisations to conduct capacity-building workshops for our employees in order to improve our practices and knowledge of important ESG issues. UOB is committed to supporting responsible financing in the region and works closely with our customers to reduce and to manage the ESG impact of their businesses. We will continue to engage our stakeholders to ensure material ESG concerns are duly considered and adequately addressed.