Reviewing the post crisis landscape and unanswered questions surrounding technology & innovation

By Thomas Dodd, Chief Compliance Officer, Moneta Money Bank

Can you please tell the Risk Insights readers a little bit about yourself, your experiences and what your current professional focus is?

I have been a UK expat for many years, having worked in France, the United Arab Emirates and the Czech Republic. I have held roles mainly in the regulatory, compliance and operational risk areas for the last 20 years. My main focus now is on building a safe, efficient and seamless digital client onboarding process. This is an exciting area which is opening up the pan-European banking market.

What, for you, are the benefits of attending a conference like Risk EMEA 2019 and what can attendees expect to learn from your session?

An interesting conference is like a good, interactive training course. It gives you the chance first and foremost to learn something new. In my case, I like to get a sense of what’s going on in the companies of other participants – what are their key focus areas, what are their views on the latest trends and assess if my organization is behind the curve. I tend to come away from a good conference with at least 2 or 3 areas on which I feel I need to spend more time. Finally, it’s great to meet new people and share ideas.

I hope the attendees at my sessions can learn a little of my experience at the sharp operational end of digital technology and innovation and can take something away from my observations of the future role of risk management.

In your opinion, how can we look to effectively monitor technology output with machines undertaking critical thinking activities?

Whatever we automate, for the foreseeable future, where critical thinking and decision-making are performed by artificial intelligence, we will still need a level of human oversight and a point in a process where results are analysed, reviewed and validated.

Do you see a trend towards utilising data scientists over risk managers as technology advances, and what implications could this have on future management?

Yes, I think the trend is already in evidence. It makes sense to leverage new forms of data and data analysis to improve the flow of data inputs into the decision-making process. Some argue that the implication of this is that data scientists can ultimately replace the traditional Risk Manager role completely. I am a little sceptical on this as I see the role of the Risk Manager as going beyond pure data-driven decision-making and assessing other non-correlated events.

What in your opinion are the key skills required of risk managers as technology continues to evolve and cyber intrusion risks increase?

Good domain knowledge – let’s not forget the basics.

Experience – of the different elements of the economic cycle, of different environments, different companies and business models and of bad structural or operational mistakes. Crises have a nasty habit of bringing reality to bear on over-hyped new trends or assumptions that turn out not to hold true in all market environments.

An open mind and the patience to take the time to understand, at least at an elementary level, the operational utility of new technology balanced with a healthy dose of scepticism to detect where exaggerated claims are made as to the benefits.

How do you see the impact of technology and innovation evolving over the next 6-12 months?

In financial services, the key technological advancements centre around the digitization of banking and the opportunities for new entrants, as the traditional barriers to entry are reduced. In the retail banking space, with regards PSD2 and open banking, the next key milestone is the entry into force of the regulatory technical standards related to strong customer authentication in mid-September of this year. This will complete the regulatory framework that will allow digital payments market to open up to third party providers using API solutions to reach bank customers directly. This, coupled with the move to digital onboarding and provision of products online and even cross-border, will drive very significant changes to the retail banking market. Those banks that fail to adapt their business models with find themselves under significant pressure.