Canadian Lawyer InHouse

SEPTEMBER 2016 20 INHOUSE Departments combine efforts to tackle criminal risk By Jennifer Brown C riminal activity can harm a company's reputation, result in fi nancial loss, in- crease regulatory and compliance risk and erode customer confi dence. With that in mind, the security team within BMO Financial's Legal and Compli- ance Group implemented a Criminal Risk Management Framework in July 2015. The team leader was Milva Recchi, di- rector, enterprise fraud risk management, who worked closely with BMO's legal team to create a framework to address the evolv- ing nature of criminal risk across the bank. Three years ago, Recchi was hired to take responsibility for fraud management across the enterprise. "Soon after I was hired, it was pretty evident we had to think a little bit more broadly in terms of fraud so we ex- panded it to criminal risk so we were dealing with what was evolving in the world today," she says. "This framework helps BMO Financial Group understand criminal risk across the whole organization." The framework focuses on gover- nance, identifi cation, mitigation, measurement and reporting. The culmination of a multi- year initiative, the framework is designed to enhance BMO's criminal risk management ca- pabilities, optimize resources and improve effi ciencies and effectiveness. It provides an integrated view of how the bank manages criminal risk, with en- gagement from all business areas and key business partners. "Key to the success of the framework has been the col- laboration across the business groups," says Recchi. "It allowed ROBIN KUNISKI INHOUS USE k so we were de deal alin ing n the world today, y," ork helps BMO and criminal anizati tion." es on gover er- mitigation, in i g. multi- ework MO's nt ca- urc rces s and des an he bank with en en- ess ss areas s. of the the col ol- business t al allowed CATEGORY: Risk Management DEPARTMENT SIZE: Large COMPANY: BMO Financial Group groups like anti-money laundering, fraud, security and privacy to really collaborate and defi ne processes and look at data inte- gration opportunities." Work on the framework began when bank leaders identifi ed the need to imple- ment an enterprise-wide framework at a time when the management of criminal risk at BMO was viewed as decentralized. The bank's executive vice president and general counsel Simon Fish tasked the vice president and chief security offi cer Ed Rosenberg with implementing the frame- work after extensive benchmarking that included a survey involving more than 60 leaders from a dozen organizations globally, as well as much discussion with stakeholders and leaders at BMO. The fi ndings demonstrated that orga- nizations that moved to a centralized and integrated model were able to enhance risk management and create effi ciencies when handling criminal risk. The framework follows the three lines of defence and establishes a clear engagement model that defi nes BMO's criminal risk cul- ture based on governance, identifi cation, measurement, management, mitigation and reporting. Additionally, its focus on develop- ing criminal risk integration helps to provide a 360 view of criminal activity by enabling BMO's anti-money laundering, information security, fraud and privacy teams to work to- gether to identify processes, technology and data integration opportunities to enhance overall criminal risk management. The projected outcome is a reduction in risks — criminal, reputational, operational and legal — as a result of the legal group handling this area of risk management. IH L to R – Ed Rosenberg, Marian Rutherford, Milva Recchi, Diana Brydon, Siobhan Dooley and Simon Fish.

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