ISSC363 Week 8 Risk Mitigation Strategy Assignment CASE STUDY PHASE 3 – FINAL PHASE Your Case Study is due by the end of Week 8. There will be a penalty

ISSC363 Week 8 Risk Mitigation Strategy Assignment CASE STUDY PHASE 3 – FINAL PHASE

Your Case Study is due by the end of Week 8. There will be a penalty for late submissions (See Syllabus for Details).

The key to this assignment is to demonstrate your understanding of the topics, not to re-word the text or reference material. Please see Appendix A for the grading rubric on all written assignments.

Please complete the scenario below following these guidelines for your deliverable.

This portion of the Case Study assignment must be a minimum of 2 pages double spaced; plus the existing information from Case Study 1 & 2, plus a title page and a reference page for a minimum total of 8 pages.

Make sure you are using at least two (2) ADDITIONAL academic references for this phase.

This submission should be created following APA 6th edition guidelines.

The paper is to follow the APA style guide, Sixth Edition (available via bookstores).

Also refer to APA’s online resources: http://apastyle.apa.org/learn/tutorials/basics-tut…

and the APUS web site: http://www.apus.edu/Online-Library/tutorials/apa.h…

Submit your assignment as a MSWord attachment.

You will be required to run your paper through Turnitin.com, ensure that your similarity index is sufficiently low, and submit an originality report with your paper.

A) DISCUSS POSSIBLE RISK MITIGATION STRATEGIES BASED ON YOUR FINDINGS AND DISCUSSIONS IN CASE STUDY 1 & 2

B) ENSURE YOUR REFERENCES PAGE CONTAINS AT LEAST 6 SOURCES.

Running Size of your deliverable should include the 2 Pages of content for this phase, a title page, the references page, plus the 4 pages from Case Study Phase 1 &2 for a total of 8 pages (including title and references). Running head: RISK ASSESSMENT
1
Risk Assessment
Daryl Snipes Jr
American Military University
March 29, 2019
RISK ASSESSMENT
2
RISK ASSESSMENT
3
The term risk may refer to the probability of threat of damage, loss, liability, and injury to
individuals or negative occurrences associated with internal/external vulnerabilities that can
cause problems to the firm. Companies’ management teams ensure that employees understand
the risks that can lead to failure and subsequent closure, hence the need to accomplish the set
goals and objectives. Indeed, to prevent losses associated with various forms of risks, investors
insure the firms against foreseen or unforeseen challenges that can lead to losses (Hall, Mikes, &
Millo, 2015). For example, economic downturns and natural calamities can cause damage and
financial losses that the firm had not expected. While management teams cannot prevent all
forms of uncertainties, the management should understand the significance of taking appropriate
measures that can protect the organization from damages or losses associated with various forms
of risks.
All organizations face risks associated with foreseen or unforeseen issues, including
inappropriate employee behavior and economic challenges. In this case, Wells Fargo represents
an organization that one can perform a risk assessment. As a financial institution, Wells Fargo
faces various forms of uncertainties, including workers’ misconduct, economic downturns, and
investor or partner demands that can derail the institution’s activities. The executive or
management teams need to focus on the implementation of its values and principles as indicated
in its mission and vision statements. The organization’s leadership team should always consider
the less risky ventures and focus on diversification as a mechanism of spreading risks, especially
those associated with equity investments to minimize possible losses.
One of the risks that Wells Fargo faces involves management practices. One of the
largest financial institutions had faced challenges associated with the opening of millions of
accounts without customers’ consent. From the experience, the management had not performed
RISK ASSESSMENT
4
its duty of supervising the activities of its employees, which led to the scandalous practices so
that employees could receive additional financial incentives. The emergence of scandals
threatens the position of the firm in market, especially on issues involving competitors, investors,
partners, and customers (McCoy, 2018). The regulators’ reports indicate that the firm should pay
over $1 billion as settlement for challenges associated with auto loan and mortgage issues, as
well as compliance risk concerns.
Legal issues pose a major risk to an organization of Wells Fargo status. The challenges
associated with permissible activities can cause commercial problems. Indeed, the overall studies
revealed continued abuses in recent months that exposed the firm to potential penalties that
increased the banking risks. The management’s acceptance of potential illegal activities
concerning account opening, mortgage, and auto loan issues meant that competitors could take
the opportunity to increase their market share. Indeed, the current executive team has played a
significance role in trying to assess the risks and avoid similar challenges in the future (Levitt,
2019). Although such organizations enjoy their freedom as legal entities, political or government
interference poses a major risk that can lead to closure of the institution.
Risks can cause damage and losses to an organization, especially on commercial terms.
Investors and consumers play an essential role of ensuring that a firm’s activities run smoothly
but can leave if management challenges arise (Epure & Lafuente, 2015). Wells Fargo faces
various forms of risks associated with recent management practices that threatened its influence
in the US market. As such, for an organization to survive, it requires consumer and investor
confidence since they help to minimize the impact of foreseen or unforeseen uncertainties.
References
RISK ASSESSMENT
5
Epure, M., & Lafuente, E. (2015). Monitoring bank performance in the presence of risk. Journal
of Productivity Analysis, 44(3), 265-281.
Hall, M., Mikes, A., & Millo, Y. (2015). How do risk managers become influential? A field
study of toolmaking in two financial institutions. Management Accounting Research, 26,
3-22.
Levitt, H. (2019, Feb). Wells Fargo sees rising legal risk as talks start with DoJ, SEC. Financial
Planning. Retrieved from https://bic.financial-planning.com/articles/wells-fargo-seesrising-legal-risk-as-talks-start-with-doj-sec
McCoy, K. (2018, Apr). Wells Fargo faces $1B fine from federal regulators over mortgage, auto
loan abuses. USA Today. Retrieved from
https://www.usatoday.com/story/money/2018/04/13/feds-seek-1-b-settlement-wellsfargo-mortgage-auto-loan-abuses/510207002/
Running head: RISK ASSESSMENT METHODOLOYG FOR WELLS FARGO
Risk assessment methodology for Wells Fargo
Daryl Snipes Jr
American Military University
April 12, 2019
1
RISK ASSESSMENT METHODOLOGY FOR WELLS FARGO
2
Risk assessment methodology for Wells Fargo
Introduction
It is arguably true that for organizations to succeed in today’s competitive environment,
they need to improve their performances so as to increases their profits while maintaining a large
market share in the industry. This requires the respective companies’ abilities to identify the risks
associated with the products or services they offer. According to Covello and Merkhoher (1993),
risk can be based on two-dimension aspects; the possibility of the uncertain outcome over the
magnitude and timing of the results. As a result, since all businesses are prone to risk at one point
in their cycles, it is logical to assess them by identifying the risk profiles, analyzing and
prioritizing them on the basis of the magnitude. This would help in planning and developing a
mitigation strategy which if implemented would minimize the losses in case they occur.
Risk Assessment methodology for Wells Fargo
Wells Fargo is an international company that is involved in financial services whose
headquarter is based in the United States. It is regarded as the fourth largest bank in America by
total available assets. The bank had been reporting trajectory upward profits until the recent
scandal which involved its employees creating more than 2 million fake accounts. Therefore,
operations such as management and legal systems in the corporations involved are prone to high
risks. Also, financial risk such as stakeholder’s investment, the association between individuals
and customers and the market demands are the other areas which require assessments.
To assess the risks in these areas, one of the best methodologies to use is the Baseline
Risk Assessment (BSA) which suits the situation in the Wells Fargo. The method allows the
establishment of risk profiles associated with management, finance and employee’s welfare and
conduct. According to Boshoff (. n.d.), the technique prioritizes assessments on issue-based risk.
RISK ASSESSMENT METHODOLOGY FOR WELLS FARGO
3
By using this methodology, the company will establish major vulnerabilities that may have
negative impacts through benchmarking of the potential risks. Some of the risks such as the case
of the creation of fake accounts would be identified by auditing the client’s accounts. By
analyzing the activities and coming up with the possibilities helps in keeping the management in
high alerts. Furthermore, the method allows the evaluation of the available risk assessment
measures.
By using this approach, the company can concentrate on the broader overview which
helps in identifying the risk profiles that require more assessments. Additionally, the process can
be applied in all the organizational structure departments in the corporation. Thus, it offers an
opportunity of analyzing a specific risk in advance and finding the root cause. Moreover, the
methodology offers advance policies and planning which would be triggered in case of an
unfortunate situation which would aid the continuity of the company regardless of the severity of
the event.
Litigation and suits are some of the risks associated with financial institutions. This
may be as a result of customer unsatisfaction or mismanagement of their funds or loss of funds to
system errors. By assessing particular areas which may result in suits will help in creating
policies guidelines that will aid in preventing the occurrence of the risks. Such a risk assessment
can be carried at both individual levels or by the whole organization. Therefore, by using the
Baseline Risk Assessment methodology, Wells Fargo will be well positioned to deal with the
imminent risks.
RISK ASSESSMENT METHODOLOGY FOR WELLS FARGO
4
Reference
Boshoff, T. (n.d.). Different types of risk assessments. Retrieved from
http://www.labourguide.co.za/health-and-safety/1512-different-types-of-risk-assessments
Covello, V., & Merkhoher, M. (1993). Risk Assessment Methods. Springer.
Epure, M., & Lafuente, E. (2015). Monitoring bank performance in the presence of risk. Journal
of Productivity Analysis, 44(3), 265-281.
Hall, M., Mikes, A., & Millo, Y. (2015). How do risk managers become influential? A field
study of toolmaking in two financial institutions. Management Accounting Research, 26,
3-22.
Levitt, H. (2019, Feb). Wells Fargo sees rising legal risk as talks start with DoJ, SEC. Financial
Planning. Retrieved from https://bic.financial-planning.com/articles/wells-fargo-seesrising-legal-risk-as-talks-start-with-doj-sec
McCoy, K. (2018, Apr). Wells Fargo faces $1B fine from federal regulators over mortgage, auto
loan abuses. USA Today. Retrieved from
https://www.usatoday.com/story/money/2018/04/13/feds-seek-1-b-settlement-wellsfargo-mortgage-auto-loan-abuses/510207002/
RISK ASSESSMENT
5
Case Study 1
The term risk may refer to the probability of threat of damage, loss, liability, and injury to
individuals or negative occurrences associated with internal/external vulnerabilities that can
cause problems to the firm. Companies’ management teams ensure that employees understand
the risks that can lead to failure and subsequent closure, hence the need to accomplish the set
goals and objectives. Indeed, to prevent losses associated with various forms of risks, investors
insure the firms against foreseen or unforeseen challenges that can lead to losses (Hall, Mikes, &
Millo, 2015). For example, economic downturns and natural calamities can cause damage and
financial losses that the firm had not expected. While management teams cannot prevent all
forms of uncertainties, the management should understand the significance of taking appropriate
measures that can protect the organization from damages or losses associated with various forms
of risks.
All organizations face risks associated with foreseen or unforeseen issues, including
inappropriate employee behavior and economic challenges. In this case, Wells Fargo represents
an organization that one can perform a risk assessment. As a financial institution, Wells Fargo
faces various forms of uncertainties, including workers’ misconduct, economic downturns, and
investor or partner demands that can derail the institution’s activities. The executive or
management teams need to focus on the implementation of its values and principles as indicated
in its mission and vision statements. The organization’s leadership team should always consider
the less risky ventures and focus on diversification as a mechanism of spreading risks, especially
those associated with equity investments to minimize possible losses.
One of the risks that Wells Fargo faces involves management practices. One of the
largest financial institutions had faced challenges associated with the opening of millions of
RISK ASSESSMENT
6
accounts without customers’ consent. From the experience, the management had not performed
its duty of supervising the activities of its employees, which led to the scandalous practices so
that employees could receive additional financial incentives. The emergence of scandals
threatens the position of the firm in market, especially on issues involving competitors, investors,
partners, and customers (McCoy, 2018). The regulators’ reports indicate that the firm should pay
over $1 billion as settlement for challenges associated with auto loan and mortgage issues, as
well as compliance risk concerns.
Legal issues pose a major risk to an organization of Wells Fargo status. The challenges
associated with permissible activities can cause commercial problems. Indeed, the overall studies
revealed continued abuses in recent months that exposed the firm to potential penalties that
increased the banking risks. The management’s acceptance of potential illegal activities
concerning account opening, mortgage, and auto loan issues meant that competitors could take
the opportunity to increase their market share. Indeed, the current executive team has played a
significance role in trying to assess the risks and avoid similar challenges in the future (Levitt,
2019). Although such organizations enjoy their freedom as legal entities, political or government
interference poses a major risk that can lead to closure of the institution.
Risks can cause damage and losses to an organization, especially on commercial terms.
Investors and consumers play an essential role of ensuring that a firm’s activities run smoothly
but can leave if management challenges arise (Epure & Lafuente, 2015). Wells Fargo faces
various forms of risks associated with recent management practices that threatened its influence
in the US market. As such, for an organization to survive, it requires consumer and investor
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