Risk appetite
Risk Appetite: TAVA
TAVA (Target Actual Variance Analysis) is a breakthrough approach to risk appetite, a challenge that has long eluded vendors and clients alike.
TAVA defines risk appetite by aligning it with key business drivers such as revenue, cost and assets, so risk data can be read in the context of overall business performance. The module supports risk monitoring, risk response and sound business decisions.
The operational risk appetite challenge
Setting operational risk appetite is harder than for credit and market risk. FinMio lets you establish how much operational risk you will accept to meet objectives, with the flexibility to define appetite at various organisational levels.
A method grounded in performance
The module uses a straightforward method based on historical and expected performance, keeping business goals and risk management aligned. Appetite is expressed in terms leadership already understands, not abstract risk scores.
Real-time monitoring against appetite
Integrated with the Risk Event module, it monitors actual losses against predefined appetite in real time, so breaches surface as they happen rather than at period end.
Consistent regulatory alignment
Consistent financial and non-financial parameters apply to all compliance and conduct risks, ensuring regulatory alignment across the business.
Frequently asked questions
What does TAVA stand for?
TAVA stands for Target Actual Variance Analysis, FinMio Risk’s methodology for defining and monitoring risk appetite against real business performance.
Why is operational risk appetite harder to set than for credit or market risk?
Credit and market risk have established quantitative measures, while operational risk appetite must be linked to business drivers. FinMio lets businesses define how much operational risk they will accept at various organisational levels.
How does the module monitor breaches?
It integrates with the Risk Event module to track actual losses against predefined appetite in real time, rather than only reviewing them at period end.
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