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  • Writer's pictureSimon Wilson

Key Takeaways from today’s RiskMinds CRO Forum

Updated: Dec 4, 2019

Tribus have been attending the RiskMinds conference in Amsterdam this week. The first day focuses on the CRO inbox. Here are our key takeaways from the day:

Vendor risk management challenges

  • Are our outsourcers (to the nth level) compliant?

  • What are their single points of failure?

  • How do we monitor continuously?

Reputational risk - still requires work

  • Does tone at the top really permeate through to the rest of the organisation?

  • “If you have to rely on regulation you have failed somewhere”

  • Accountability for risk will only increase in 2020

Disruption and horizon scanning - not there yet

  • If you think you have it covered you’re most likely complacent

  • 2/3 of delegates’ firms do not have sufficient predictive analytics for horizon scanning

Economy - uncertainty and pessimism

  • Are banks safe? “Yes…..if you believe the models”

  • Populism and nationalism here to stay unless/until growth in excess of 2% - will require some hard choices on economic and social reform, especially in Europe

  • Brexit – Need deal, quickly, with Angloshpere to make it worthwhile

Resilience in a world of volatility

  • Unexpectedly high LGDs will be a big issue, especially in shadow banking

  • Non-bank lenders holding large NPL portfolios will behave differently to the banks in a downturn – but with what level of contagion?

  • Many fintechs vulnerable to a downturn – as with dot-com crash could be some bargains to be had

  • Still too many Zombie firms with high leverage – won’t survive another downturn

  • Most traditional lenders need to structurally reorganised whilst cutting costs - how to meet long term vision of a sustainable business model with short term financial demands…?

  • Are cost of capital return hurdles too high in a world of negative interest rates?

  • Have a playbook of actions to take in event of downturn that is triggered by KRIs (failure to plan=plan to fail)

  • Hold on to capital in downturn to make most of opportunities a crisis presents

  • Spend as much effort and resources on profitability as on capital ad liquidity

Climate Change - must do better....much much better

  • Climate risk is not just the physical – but permeates every aspect of risk – policy, legal, technology, reputational, financial

  • Can’t solve it without China

  • Nobody believes the corporate “blah-blah” – leaders need to have a view and to embody that through personal action

  • Need to double to treble our rate of decarbonisation to stand a chance of making a real difference

  • Stop being incremental in approach – true innovation and creativity comes by attempting to make 90% change not 0.9%

How do we return to profitability?

  • The risk function has a wealth of data and tools to provide real help to customers. Used in conjunction with appropriate data compliance, it can make a real difference to clients as it did for Nationwide ( Good customer experiences create loyalty and advocacy.....and new business.

  • Use your own product and learn from it

  • Embed compliance and financial crime specialists into the new product development teams

  • Think beyond traditional bank services – if you only continue to provide these you’re dead. Look to broaden out across the value chain that data and analytics provide

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