Design Principles for Bank Risk and Control Transformations

This document is a guide outlining six design principles for bank risk and control operating model transformations in 2024. It serves as a foundational resource for senior management in banks to identify key priorities and design decisions necessary for effective risk management. The principles are derived from an analysis of supervisory priorities from UK and EU regulators, strategic risk management trends, and insights from Avantage Reply's work with major financial institutions. The principles emphasize the importance of effective management oversight, risk-proofing the deployment of novel technologies, embedding operational resilience, and cultivating a progressive risk culture. Additionally, the document discusses the necessity of strengthening risk intelligence capabilities and maintaining a focus on climate risk management. It highlights the role of management bodies in overseeing risk and control frameworks, particularly in light of recent regulatory developments and the challenges posed by new technologies. The content is intended for various stakeholders within banks, including executives and heads of risk functions.