In 2017, Group Risk Management instituted several enhancements to manage evolving risks better. We enhanced our Group Technology Risk Management Framework with refinements in the methodology for managing technology risk. We also enhanced our Governance, Risk and Compliance (GRC) system to improve efficiency and incorporate new regulatory requirements on outsourcing. We will continue to enhance the GRC to achieve automation and standardisation of key compliance, operational risk and audit activities for all business and support units across all subsidiaries and branches. 

2017 also saw our dedicated Integrated Fraud Management (IFM) unit establish an IFM strategy and framework for fraud prevention, detection, response, remediation and reporting. The framework covers the roles and responsibilities of the First Line of Defence with integrated oversight by the Second Line of Defence and audit assurance by the Third Line of Defence. We also established dedicated IFM teams in our overseas subsidiaries and ensured all First Line business and support units received structured training on IFM requirements. 

Significant investments were made in 2017 to ensure our market risk management capabilities kept pace with the dynamic environment. These included investments in system projects to improve risk limit monitoring, profit and loss reporting and enhancements to improve our efficiency in acquiring, validating, storing and distributing market data within the Bank. 

For liquidity and interest rate risks, we have enhanced our systems to meet regulatory and industry standards for Net Stable Funding Ratio and Interest Rate Risk in the Banking Book (IRRBB). The IRRBB enhancements were notably completed ahead of the 2019 regulatory implementation date. The strengthened system capacity has significantly pushed ahead the Group’s capability to optimise, to monitor, to report and to manage its liquidity and interest rate risks. We also achieved good progress in projects to support the upcoming regulatory requirements arising from the Fundamental Review of the Trading Book. These projects are on schedule to meet the stipulated regulatory implementation date.

We recognise the material reputational and credit risk implications that environmental, social and governance issues (ESG) could have on the Bank. In 2017 we enhanced our policy on responsible financing and intensified our capacity-building efforts in this area*. UOB is committed to responsible financing and will work closely with our customers to manage the ESG impact of their businesses. We will continue to engage our stakeholders to ensure that material ESG concerns are duly considered and adequately addressed.