By Paul Kennedy, Chief Risk Officer, National Bank of Kuwait
Can you please tell the Risk Insights readers a little bit about yourself, your experiences and what your current professional focus is?
I have worked in financial services for 27 years, including 10yrs in Switzerland + 12yrs in Australia. I have had a variety of roles from front office trading through to setting up the risk function for a corporate regulator, and from Tier 1 organisations through to obtaining a licence for a challenger bank. Prior to entering the commercial world I obtained a PhD from Cambridge University in the UK, and I still occasionally teach MBA students.
I am currently based in London as the Chief Risk Officer of the UK subsidiary of the National Bank of Kuwait, and aside from the day-to-day transaction flow my focus is on implementing a risk framework that works for a small-to-mid sized bank but that still satisfies the requirements of regulation.
What, for you, are the benefits of attending a conference like Risk EMEA 2019 and what can attendees expect to learn from your session?
All banks struggle with similar challenges around the complexity of regulation and the speed and volume of change. Risk EMEA is perhaps a chance to learn from others, not only in terms of what has worked for them, but also perhaps in terms of what hasn’t worked and why.
Pooling of experience gives participants the chance to direct their own efforts more effectively and efficiently.
In your opinion, where is the next big change and how can financial organisations best prepare?
Modern finance is essentially bookkeeping + messaging + analytics, all constrained by a complex set of regulations. Data-driven companies and “FinTechs” possess all three core capabilities and can adapt at speed, so there is now an unprecedented degree of challenge to the traditional model of a bank.
Banks still have the advantage of experience and regulatory expertise, but will need to become more technology-driven – which will be mostly a challenge around culture.
What are the key considerations that need to be made when benchmarking against the industry?
More than ever, small and mid-sized financial firms tend occupy distinct “niches” in terms of products and customer segments. What works well for a small private bank may not be as appropriate for a retail payments processor.
What challenges and opportunities do you foresee when keeping up with the pace of change?
- Culture – attitudes of senior managers are formed over careers spent in traditional operations and processes. Can they challenge effectively what they are familiar with?
- Legacy and “Infrastructure Debt” – how do we keep the old business lines running and generating revenue while we build and re-engineer our organizations?
- De-Personalized Relationships – customer relationship are conducted increasingly via devices not face-to-face, which presents both opportunities and dangers.
- Inadvertent Consequences – banks are facing a high volume of regulation, not always coherent / consistent (e.g. IFRS accounting deductions from capital).
How do you see the impact of regulatory landscape evolving over the next 6-12 months?
Uptick in the amount of regulatory reporting (e.g. PRA 110)
