FutureRiskMinds celebrates up and coming leaders in the risk management industry, and called on them to share their thought leadership what the future of risk management will look like. Here's what Harriet Morris-Sloane, Manager, Group Risk Governance and Appetite at HSBC Bank told us:
Over recent years risk teams in the financial services industry have grown in both their importance and remit to take their place centre stage in the decision making process. Thankfully gone are the days when risk management was viewed as a ‘backwater’ function sat in the corner of the darkest office in the building. The future of risk is one of broader coverage, collaboration, business focused support and adaptability.
The exponential growth of risk is, in part, a consequence of the 2008 economic crisis, an increase in regulations and fines and an acknowledgement that as an industry we could do better. But it is also due to the subsequent value add demonstrated by dynamic risk functions. Words and phrases such as “risk appetite” and “controls” are used in the lexicon of everyday business. Risk now means more than traditional credit risk, with increasing focus on non-financial risks now being integral to day-to-day decision making. This is a trajectory that will continue over the years to come with increased focus on newer areas such as sustainability and model risk.
Risk now means more than traditional credit risk, with increasing focus on non-financial risks now being integral to day-to-day decision making.
Risk’s remit will continue to broaden, with risk managers advising across a wide range of matters, from the use of machine learning in credit to cyber threats. Whilst some of these risks sit within traditional ‘bread and butter’ work of risk management, some are new untested areas of risk. One of the challenges will be to support and enable our front line colleagues to deliver their objectives in that fast paced, more ambiguous environment whilst not compromising on risk standards. To do this, appropriate risk management structures and frameworks must be in place, supporting us to meet those challenges with clear thought and appropriate due process.
The impact of technology is an example of new risks presenting both challenges and opportunities. Fintech and AI are set to shake up the industry, and technological advances have set new consumer expectations as well as new ways to manage risk. Risk managers must be agile enough to keep pace with changes whilst continuing to support their stakeholders and innovative enough to change alongside their client-facing colleagues in order to be seen as business enablers and to stay relevant in the years to come.
Fintech and AI are set to shake up the industry, and technological advances have set new consumer expectations as well as new ways to manage risk.
The impact and co-dependency of risks are also becoming ever more intertwined. The future of risk is one of much stronger collaboration and interdependency. Risk management teams will need to provide a ‘joined-up’ approach across traditionally siloed areas in order to trouble shoot, share information and better predict second order impacts of possible events.
A broader remit, less clarity, and the fast pace of change will require risk management to be agile in its response; risk management teams have to be able to support, and at times pioneer changes, and feel comfortable operating and advising in uncertainty and ambiguity.
