RBC carefully weighs the impact of our services and business practices on the economic, social and environmental fabric of the communities in which we operate.

Risk structure and management
RBC’s strategic risk management process includes the identification, measurement and monitoring of risk in all our businesses. Management and board committees oversee the risk management process, review, monitor and provide direction and communicate the organization’s risk culture. Our risk structure is illustrated below.

RBC’s business activities expose us to a wide variety of risks, outlined below.

Credit risk is the risk of loss due to the inability of an issuer, debtor, borrower, policyholder, reinsurer or guarantor to fulfill payment obligations, or a loss in market value due to the deterioration of a counterparty’s financial position;
Market risk is the risk of loss resulting from changes in interest rates, foreign exchange rates, equity prices and commodity prices;
Liquidity risk is the risk that RBC is unable to generate or obtain sufficient cash or equivalents on a cost-effective basis to meet our commitments as they fall due;
Insurance risk is the risk inherent in the development, issue and administration of insurance policies, including product design as well as pricing, claims administration, underwriting and liability risks;
Operational risk is the risk of direct or indirect loss resulting from inadequate or failed technology, human performance, processes or external events.

We use the Risk Pyramid below as a graphic tool to help identify and assess risk across all parts of RBC.

Compliance
Like any citizen, RBC Financial Group and our employees must comply with the laws, regulations and ethical codes of conduct in all the markets in which we do business.

RBC’s Compliance department is responsible for implementing and maintaining integrated compliance management policies and processes to ensure quality and consistency of compliance performance. Some of our key policies cover issues such as disclosure, competition, employee trading and insider trading.

Anti-money laundering
Consistent with the new Canadian anti-money laundering regulations, RBC has introduced changes to processes pertaining to client identification, transaction reporting and record keeping requirements designed to detect, prevent and deter money laundering activities. We have implemented a new anti-money laundering system to report unusual client transactions, and support legislated reporting requirements.