I was privileged to chair a master class stream at the recent Ri$kMinds Geneva conference, where we discussed topics related to enterprise wide bank risk management & the skills required to be a sound risk manager. My chairman role gave me the best seat in the house to observe some of the key issues and exciting developments within our risk world today.
I have good news and bad news… so let’s get the tough stuff over with first…
Risk Management is more independent than before the financial crisis in many banks, but the risk governance structure of most banks still falls woefully short of acceptable guidelines (from regulators or independent risk practitioners). Moreover, and most disturbing perhaps, is that the risk management function is still not considered as an equal partner to the business it oversees. Given that business strategy and its execution needs to be within the acceptable risk appetite of a bank, then one wonders if anything has been learnt from the crisis in 2008.
On a more positive note, it was heartening to hear, as a risk training consultant, the unanimous plea for more holistic, broader skills to complement the technical, regulatory and compliance expertise needed to become an experienced risk manager.
In my mind the integration of interpersonal and leadership skills with our more technical disciplines is critical. Establishing this mix will require a commitment to training new professionals and re-shape established professionals through more dynamic training initiatives.
So, the up-skilling of risk management now has 2 prongs of attack: learning something about all the risk disciplines and bank businesses; and learning how to be a leader. This means we can no longer afford to view training as a cost; it needs to be reassessed as an investment to drive better performance through wider competencies and well-rounded skill sets.
I also agree with comments made regarding the need for qualifications across risk management. There is no formal approach to identifying those superstars in their disciplines. Furthermore, we urgently need to enhance the reputation of the risk management in an industry where the bond of trust between banks and stakeholders has been broken. Risk management needs to be viewed as a profession not a function.
Offering a globally acceptable risk qualification or accreditation within the banking industry will go a long way to achieve these aims. If we need a surgeon to operate on us, we would research his records to determine the best and most qualified person to do the job. Why can’t we do this in banking? Maybe, if we could then it would separate the sheep from the goats!
At Consultancy Matters our passion is to equip financial services professionals with skills to navigate some of the “rough seas” highlighted at the conference. We provide clients with strategic learning and development solutions across leadership, compliance and risk disciplines to help them chart their way and reach those calmer and safer waters.
President & CEO