Risk Technology and Data Analytics Flashcards
6 cards from real CRA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Risk Technology and Data Analytics flashcards as text
What is the primary purpose of stress testing in risk management?
Answer: To evaluate how extreme scenarios would impact an organization's financial position
Stress testing simulates adverse scenarios to assess potential impacts on an organization's financial health and risk exposures.
What technology platform is most commonly used for enterprise-wide real-time risk monitoring?
Answer: Integrated Risk Management (IRM) platforms
Integrated Risk Management platforms consolidate risk data and provide real-time monitoring capabilities across multiple risk domains.
What is 'model risk' in the context of risk management systems?
Answer: The risk of loss resulting from inaccurate or misused quantitative models
Model risk arises when quantitative models produce incorrect outputs or are misapplied, leading to flawed risk assessments and potential losses.
What is the primary benefit of automated risk reporting over manual processes?
Answer: It improves consistency, accuracy, and timeliness of risk information
Automated risk reporting ensures reports are generated consistently and accurately, reducing human error and delivering timely information to decision-makers.
What does BCBS 239 primarily address for banking institutions?
Answer: Risk data aggregation and risk reporting principles
BCBS 239 establishes principles for effective risk data aggregation and risk reporting to strengthen banks' risk management capabilities.
How does a risk appetite statement function within a risk technology system?
Answer: It sets thresholds that trigger automated alerts and escalations in risk monitoring tools
Risk appetite thresholds are programmed into risk technology systems to automatically alert management when exposures approach or exceed acceptable levels.