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By Charis Papanastasiou, Chief Risk Officer, SIB (Cyprus) Ltd, Sberbank Group
How will increased digitalization impact the future of the chief risk office?
Increased digitalisation will lead to efficiencies within the chief risk office. The enhanced availability and aggregation of data will enable quicker decisions, a more holistic view of risk across various portfolios and the reduction of subjectivity in risk assessments. Tasks related to risk measurement like identification of relevant stress scenarios, probability scoring and expected loss quantification will be largely carried out by computers. The risk manager will increasingly become a controller of automated outputs as opposed to an originator of risk analysis. The chief risk officer, in turn, will make recommendations to executive management, based on those vetted outputs.
The utilisation of new technologies like artificial intelligence and blockchain will require the chief risk office to hold a high level of knowledge diversification, ranging from traditional finance disciplines to pure data science and programming. Furthermore, resources allocated to managing cyber risk and operational risk associated with IT systems and client interfaces, will have to be considerably enhanced. As more data-driven technologies are adapted, adherence to data protection regulations will increasingly become a focus area for the chief risk office of the future.