The road ahead: What risk management could look like in 2030

The road ahead: What risk management could look like in 2030

By Chris Ekonomidis, Senior Director, Synechron.

Chris, can you tell the Risk Insights audience about your experience in the industry?

I have over 15 years of experience in the financial markets, supporting clients in market structure and efficiency demands across fixed income, equities, and derivatives. Before joining Synechron, I worked at Sapient Global Markets and EY, driving strategies related to improving business performance and risk management. At Synechron, I focus on risk and compliance consulting in the US.

You will be speaking at the forthcoming Risk Americas 2018 to what risk management could look like in 2030. What do you believe will be the key talking points amongst the panellists and why?

Innovative tech like AI, Machine Learning, Blockchain and others (yet to be invented) will shape the future of risk management and already are a large part of firms’ tech and innovation budgets and initiatives. RegTech in particular will play a key role in financial institutions’ strategies as they relate to new regulations by implementing a tech-driven approach to proactively plan for meeting regulatory needs rather than the reactionary approach many financial institutions have taken in the recent past. Utilizing a tech-first approach to regulatory requirements will lay the groundwork for firms to gain more long-term benefits from each obligation and better management of data and risk overall to achieve greater economies of scale. Firms are beginning to extend their regulatory obligations past a simple “check the box” mentality.  This will set the groundwork for the future and how we handle and mitigate risk.

Without giving too much away, how do you envision the risk management landscape looking in 2030?

I believe that by then, some of the innovative technologies we are exploring in our risk management solutions will start to reach maturation at that point. However, data and calculations will be more complex – so the cycle will continue in furthering innovative technologies and solutions to keep up.

In your opinion, how do you foresee technology and innovation playing a part in the evolution of the risk landscape?

Innovative technologies are already being used to explore and lay the foundations for solutions that will become the norm over the next decade or so. The important thing is that the landscape will change the way and timescales for how we understand risk management – firms across the board will be more proactive rather than reactive and they can use the change in processes to further optimize business initiatives.  We’re accelerating through another technological transformation and the only constant over the next dozen years will be change.

Finally, what regulatory changes do you foresee in the future? And do you have any advice for your peers on how best to handle them?

The regulatory environment of the financial industry has changed rapidly since the financial crisis and it isn’t done yet.  I am sure that the current regulations will change in the future and that new ones will crop up as well – particularly pertaining to emerging technology – as RegTech becomes mainstream, regulations might change.  Future innovations and new solutions will be created using technology that we can’t even imagine today – we will need answers for how these should be regulated.  Blockchain and cryptocurrencies have been around for a few years now, and regulators are still trying to figure out how to best handle these.  New technologies will play a big part influencing new regulations.  The common tenets of recent regulations will continue focusing on mitigating risks, improving transparency through robust reporting, and broadening market participation.  Regulatory demands will continue to expand, and firms should ready themselves to meet these challenges.

Hear insights like this and more at the 7th Annual Risk Americas Congress…