4 lessons risk managers can learn from banks

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:

1. Make risk management smarter, faster and more cost- effective: Reducing costs cannot undermine the need for strong risk management and controls. 

2. 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.
3. 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. 

4. Drive standardisation: Standardising, automating and centralising testing capabilities are an important vehicle for weaning off a people-dependent model.