Our risk management

Mainly active in banking, insurance, and asset management, KBC is subject to a number of industry-specific risks including credit risk, interest and exchange rate risk, liquidity risk, insurance underwriting risk, operational risk and other non-financial risks. ESG-related risks are not considered in isolation but identified as key risks which manifest themselves through these risk areas. Furthermore, integrated risks occur when the aforementioned risks accumulate and possibly reinforce each other.

Risk management refers to the coordinated set of activities to proactively identify and manage the risks that KBC faces. It helps KBC to achieve its objectives and to realise its strategy.

The KBC Enterprise Risk Management Framework (ERMF), approved by the Board, defines the risk governance, including the Three Lines of Defence, and sets clear rules and procedures on how risk management should be performed throughout the group. It refers to a set of minimum standards and risk methods, processes and tools that must be translated into all risk-type-specific Risk Management Frameworks (RMFs) and that all entities must adhere to. The ERMF and risk-type-specific RMFs not only detail how KBC manages risks in business as usual, but also in times of change (small and big transformations) and crisis situations, up to the most stressful situations (like recovery and resolution). They also aim to keep KBC compliant with regulatory requirements. Moreover, they cover risks originating from KBC’s own operations as well as from the value chain (e.g., the provision of products and services to clients, and outsourcing activities).