Undertake Risk Identification (FNSRSK511)
Seeing risk before it bites
FNSRSK511 covers identifying, assessing and documenting risk in a financial services context. Candidates must understand risk categories (credit, operational, compliance, market, reputational), risk likelihood and consequence, and the controls that mitigate each risk.
Concepts to master
- Risk identification techniques: checklists, scenario analysis, incident review.
- Risk assessment: likelihood × consequence.
- Controls: preventive, detective and corrective.
- Risk registers and documentation.
- Escalation and monitoring.
Traps in questions
Questions often test whether a control is preventive or detective, or whether a risk has been assessed without considering consequence. Another trap is treating a risk as eliminated when it has only been mitigated. Watch for answers that identify a risk but propose no control.
Rule of thumb
Name the risk, rate it, control it, review it. A risk without a control and a review date is incomplete.
Worked example
A broker identifies that a client's income is irregular. The risk is a serviceability failure (likelihood medium, consequence high). The control is obtaining two years of tax returns and an accountant's letter, with review at approval.