By Charles Forde, Group Head of Operational Risk, AIB
What for you are the benefits of attending a conference like the ‘New Generation Operational Risk: Europe’ and what can attendees expect to learn from your session?
There are several benefits of attending the new generation operational risk Europe summit in particular I would highlight the benefits of understanding best practice and approaches in different sized firms to successfully address the challenges that we have with managing change in financial services.
What attendees can expect to learn from our session is that there is no competitive advantage among firms regarding the processes and approach to change management and that we all benefit by sharing techniques to address the common problems particularly since much of the change initiatives that we have our regular tree driven either directly or indirectly.
How can risk professionals build strategies for quick change management?
Risk professionals can build techniques for a quick change management by clearly understanding and documenting all of the drivers of change within their organisation. These include strategic investment plan initiatives small improvement initiatives BAU change and also a large volume of technology change. Technology changes alone can often be in the tens of thousands per year even in a small to mid-size financial firm.
So the risk professionals attending the summit will benefit from hearing first hand of the challenges and the success the different attendees have had in understanding the full spectrum of change in their organisation.
Why is the flexibility of operating models a key concern?
Flexibility of operating model is a key concern because organisations need to be able to respond rapidly to changes in prioritisation or in regulatory requirements. Often the full year plan for strategic change initiatives is now subject to change unexpectedly due to cost constraints and or changes in requirements from the regulators. In my experience I have often found that in order to respond effectively it is necessary to adjust the operating model in order to deliver on the priority requirements meet regulatory expectations and continue to provide services to customers.
In order to successfully manage change and to do so quickly and organisation must be able to adjust the operating model accordingly including the repositioning of resources and / or funding.
In your opinion, what are some of the key concerns surrounding geopolitical risk?
As the head of operational risk in a major banking group I do consider Geo political risk to be of increasing importance over the past few years. In particular the rising trend of nationalism around the world has led to trade barriers and regional restructures such as Brexit which is impacting the banks operations. I believe that geopolitical risk must be considered as both and non-financial risk and as a financial risk and we must collaborate across all of the risk domains to fully assess the impact on our firms. If you take the coronavirus for example this is having a significant impact on the financial risk side and it is also impacting the operational risk side of the bank as we must consider contingency planning in case we are impacted in our operations if the virus spreads.
So in summary the geopolitical risk factors are resulting in the requirement for increased collaboration between all areas of risk but also between all peer firms in the industry and with our regulators.
What advice would you give to financial institutions when building strategies for quick change management?
In order to define and implement an effective strategy for quick change management I would advise financial institutions to take the time to fully assess and document all of the drivers of change and all of their dependency is across the firm. Too often the focus on change management is within the investment portfolio which has a lot of visibility at the executive committee and board level, In order to do fine and implement an effective strategy for a quick change management I would advise financial institutions to take the time to fully assess and document all of the drivers of change and all of their dependencies across the firm. Too often the focus on change management it’s within the investment portfolio which has a lot of visibility at the executive committee on board level, But there are numerous small and medium size change initiatives and beer you change initiatives which have many into dependencies both within the bank and with external third parties. This presents a significant unknown risk. So in summary my advice is to clearly define where are you know you have visibility of your factors of change and where are you don’t. Then you can monitor and assess where resources need to be applied, often very quickly to manage these change drivers.