OPERATIONAL RISKS Governance Indosuez Wealth Management Group has produced a group-wide operational risk map, consisting of a list of activities and processes performed by each entity, using a common structure. It applies to the internal control scope of CFM Indosuez Wealth Management and its subsidiaries. At 31/12/2023, each area in the operational risk map was reviewed and validated by its business line manager as part of the annual process of review and backtesting. The cross-divisional mapping of compliance, internal or external fraud and legal risks is also validated annually by Compliance and the Legal department. The corruption risk map was presented and approved at the Internal Control Committee meeting in the second half of 2023. The action plan resulting from the mapping was also presented and is regularly followed up in the Internal Control Committee. Finally, the operational risk mapping system was enhanced in 2021 by the transposition of this mapping dedicated to the risks of corruption and influence peddling, in accordance with the requirements of the French anti-corruption law known as "Sapin II". The quarterly reports on operational losses were transferred to the CACIB RPC department using the group-wide application, Olimpia, and a summary by risk category was presented to the Internal Control Committee and the Board of Directors. As part of this, all incidents involving more than €150,000 and/ or provisions of more than €300,000 are reported to the governing and executive bodies and are individually reported in the Group-wide tool, Olimpia. Results During the 2023 financial year, operating losses including provisions were down on the previous year. This is confirmed by the quality of the operational risk indicators in the risk appetite matrix, which are below their risk appetite threshold every quarter. This control of operating losses is linked in particular to the strengthening of control systems and the training of staff in new processes (raising awareness of risk culture) and the effectiveness of counter-call procedures for attempted fraudulent transfers. Finally, with regard to the Business Continuity Plan, the systems were tested in 2023 on the fallback site for one week, with a conclusive return to normal. The overall level of IT security remains satisfactory, but in the face of new threat scenarios, awareness campaigns and projects to secure our information systems and applications continued in 2023. Exposure The cost of operational risk was €0.928m at 31 December 2023, compared to €3.53m in 2022 and €0.75m in 2021, As a result, the ratio of operating risk to net banking income will be 0.48% in 2023, compared to 2.19% in 2022 and 0.58% in 2021, Annual Report 2023 47
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