FRM Part II · FRM Exam Part II · Risk Identification
A risk manager reviewing a process map of client onboarding notes that three departments touch the process and that information passes between them by email. What is the primary risk-identification insight from the handoffs?
Handoffs between departments are key points where information can be lost or delayed, ownership can become unclear and controls may fail, especially when email is used. Process mapping makes these points visible so the risks can be identified and addressed.
- AHandoffs are the main points where information loss, delay, ownership ambiguity and control gaps can ariseCorrect
- BHandoffs eliminate risk through segregation of duties
- CHandoffs matter only for market risk
- DHandoffs indicate that the process has no owner risk
Explanation
Process maps highlight handoffs because responsibility and information move between parties, creating risks of errors, delays and unclear accountability, particularly with informal channels such as email. Handoffs do not automatically reduce risk, and they are not limited to market risk.
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