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Credit Risk for Non-Financial Firms

Credit risk is a form of financial risk that all companies are exposed to. This type of risk can arise in several different ways. Managing credit risk should be aligned with risk management process. This course will help your staff to understand what credit risk is, its components and how to recognise credit events.

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  • 40 Minutes
  • For all staff

Learning objectives

  • Understand what credit risk is, including its subtypes
  • Quantify and calculate credit risk
  • Recognise who manages credit risk within a company
  • Learn how to manage credit risk by identifying, assessing, treating, monitoring and reporting it
  • Recognise the importance of continual improvement for credit risk management

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Your questions, answered

Risk Management

How does conduct risk differ from compliance risk?

Conduct risk focuses on behaviour and outcomes, how actions affect customers and markets -  while compliance risk relates to failing to meet legal or regulatory requirements. Conduct risk is broader and more subjective, often tied to culture and ethics.

Who is responsible for managing conduct risk within a firm?

While senior leadership sets the tone, managing conduct risk is a shared responsibility across all levels, from front-line staff to compliance teams. Everyone plays a role in identifying and mitigating risky behaviour.

Can conduct risk exist in non-financial sectors?

Yes. Although the FCA regulates financial services, conduct risk principles apply across industries. Any business that interacts with customers or influences markets can face conduct-related challenges.

How can technology help reduce conduct risk?

Tools like automated monitoring systems, AI-driven analytics, and e-learning platforms can help detect risky patterns, reinforce ethical behaviour, and ensure consistent training across teams.

How often should proliferation financing risk assessments be updated?

Best practice suggests reviewing risk assessments annually or whenever there are significant changes in business operations, customer profiles, or geopolitical developments.

Why is risk scoring important for my business?

Identifying potential risks around your business is not enough. Tracking how your company manages them helps you implement policies to prevent them. The best way to get started is with a risk scoring matrix.

What is a risk scoring matrix?

A risk scoring matrix helps identify the level of risk for specific activities, such as personal data. By measuring the likelihood of something happening against how serious the consequences would be, it helps you see which areas to focus on. And what policies or procedures to put in place.

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