Bringing technology to traditional components of risk management

By Raj Dave, Director Compliance, Barclays

What, for you, are the benefits of attending a conference like the ‘Operational Risk Management Congress’ and what can attendees expect to learn from your session?

 The conference provides an opportunity to engage with like-minded risk colleagues and share best practice knowledge and expertise.

 How can risk professionals best bring technology like AI to traditional components of risk management?

Technology and its uses in Risk Management in its simplest form starts with the opportunity to automate low touch manual daily processes to improve the control environment. This does not necessarily require a huge technology budget but an incremental use case of looking at a control point and trying to enhance it through the use of some form of automation. Simple examples of this would be: How do we conduct our annual risk assessments (Manual or Automated)? How do we use technology to better train our people and gather more reach across different groups in our organization? Can the use of technology better enable our Surveillance and Monitoring control capabilities? Once baseline automation is put in place more sophisticated analysis and higher touch/complex tasks can be further developed.

How would an institution begin to identify areas that can be automated and what would be some criteria for determining eligibility?

A good way to start would be to look at the most pressing issues the firm faces as identified by other testing groups (Internal Audit), etc. Using this data, look to see how issues had root causes attributable to Manual/Human Error. In looking for patterns and themes and ask the question on whether there is an opportunity to automate a process further to manage risk by automating that process.

How can AI and Machine Learning be leveraged for areas including RCSA, KRI, QA etc?

Unsupervised Machine Learning can help risk managers be more proactive in identifying patterns and pockets of risk before actual negative events occur. It can also assist in allowing risk professionals to move away from performing lower touch activities into an environment where they can focus more of their time on more complex tasks.

What do you see ahead for the future for leveraging technology in risk management?

There is no doubt that technology and the ability to leverage will become a necessary requirement for a risk managements function to stay relevant in the future. I believe we have just touched the surface of how different types of machine learning can be used by risk management as a discipline.