Bank RMs say it is time to wean business off people-dependent risk management
Banks recognise that operationalising the risk model, and making it effective and efficient is, if not anything, more challenging than designing the broad-brush framework according to new EY research.
Results from a recent survey of bank risk managers showed lessons which can be extrapolated to include all sectors. Some of the lessons include:
- Make risk management smarter, faster and more cost- effective: Reducing costs cannot undermine the need for strong risk management and controls.
- Wean off people-dependent risk management: Traditionally, financial institutions have depended heavily on adding headcount in risk and compliance because of tight regulatory and remediation deadlines. There are now signs that people-dependent risk models are not sustainable.
- Develop a new talent strategy: Financial institutions will have to compete much harder to recruit, retain and motivate talent that can operate in contexts of not only risk but also in technology.
- Drive standardisation: Standardising, automating and centralising testing capabilities are an important vehicle for weaning off a people-dependent model.