What To Know About RCSA Today     

When people want to know their current health risks and how to better address them, they see their doctor. When financial institutions want a checkup on their operational risk approaches and their control environment, they can turn to the risk and control self-assessment (RCSA).  

Through RCSA, teams throughout an organization collaborate to identify and rank risks, identify and evaluate the effectiveness of the controls for those risks, and plot a course to fill gaps and monitor progress going forward.  

The Importance of RCSA 

A foundational article in The Global Treasurer notes that, among other benefits, RCSA:  

• “Encourages both management and staff to assume responsibility for internal controls.” 
• “Provides the opportunity to focus efforts on important informal as well as formal controls.” 
• “Acts as a bottom-up feedback mechanism.” 

Roughly two decades since banks began incorporating RCSA, a recent RMA and PwC survey found that many are now revisiting methodologies and approaches. About three-quarters of respondents said they had enhanced their RCSA programs over the past 12 months.  

The Driving Forces for Change  

• Smaller financial institutions continue to focus on methodology changes, such as risk rating approach and guidance, to meet day-to-day implementation challenges and address regulatory feedback.  
• Larger institutions seek to enhance methodology, execution, and technology use to improve RCSA quality and create efficiencies.  

In an RMA Journal interview about the survey, Alex Pflepsen, a partner in PwC’s Enterprise and Operational Risk Management practice, said demonstrated commitment from leadership is key to optimizing RCSA. “It sends a clear message about the program’s importance,” he said, “and how outputs should be used to manage risk.”  

Learn More 

Read the complete interview on the survey.   

Read about Zions Bancorporation’s effort to overhaul its RCSA program.   

Upcoming Webcast 

For a deep dive into the RCSA survey results, sign up for this February 13 webcast.