Ideas and inspiration from the 2018 RiskMinds Conference

14 December 2018

2018-12-12_14-13-52What’s the RiskMinds conference really like?

We sat down with George Stylianides, PwC’s Global Risk Consulting Leader and Global Risk and Regulation Platform Leader, to get his perspective on the conference—touted as the world's largest risk management event and attended by 650+ decision-makers from banks, buy-side, regulatory bodies and academia.

In its 25th year, PwC is the principal sponsor of this pre-eminent event that attracts CROs from the world's top financial institutions.

How did you have an opportunity to attend the RiskMinds and what’s it like at the event?

PwC is the official sponsor of the event and I’ve attended it now for the past ten years. You typically see many of the large financial institutions in attendance as well as technology companies that are there to showcase their latest applications aimed at helping organisations better manage risk.  It’s an occasion to mix and mingle with colleagues, to take the pulse of the banking industry, and to gauge what’s relevant to bank CROs.

Right now, I believe that financial institutions are finding themselves in a fundamentally altered risk and regulatory environment.  They’re trying to navigate a new competitive landscape with evolving business models.  RiskMinds presents an opportunity for risk leaders to connect with their peers to discuss current challenges around the use of technology, managing cyber-risk, and the consideration of societal risks such as climate risk.

Was there a highlight for you?

I’m always keen to see how emerging technologies —like AI and Machine Learning— are being leveraged by CROs to support compliance, control costs, and improve productivity. 

Access to data is still a hot topic in the industry.  Data-sharing is often accomplished through an application programming interface (API), which allows for the flow of data between systems in a controlled yet seamless fashion.  These APIs have been leveraged in banking settings for years, however, with the breakthroughs in advanced analytics and traction of a number of non-banking fintech companies, APIs are receiving renewed interest as a means to enhance the delivery of financial services to both retail consumers and business customers. 

PwC had the opportunity to showcase some of the financial risk solutions we’ve developed to help our clients specifically in relation model risk management and impairment provisioning. We introduced attendees to topics like Privacy and the impact of the EU regulation, General Data Protection Regulation (GDPR) and the implication of open banking pursuant to the Revised Payment Service Directive (PSD2) on bank business models. And, we are proud to say that this year 50% of our roster of speakers were female.

What were some of the most memorable sessions?

Boris Johnson, former Mayor of London and former UK Foreign Secretary, was invited to address attendees at a CRO breakfast and spoke about risk in politics.  Johnson is best known for his role in Brexit. In 2016, he became the leading spokesman for the “Leave” campaign in the run-up to the national referendum on whether the United Kingdom should remain a member of the European Union. 

Johnson spoke about his perspective on taking risks, which is aligned closely with the ideology of Winston Churchill: great success always comes at the risk of enormous failure.  He spoke about the importance of politicians, like his hero Churchill, taking a stand against the establishment and “gambling” to do the right thing.  An interesting perspective on risk, to say the least.  In my opinion, Johnson is both flawed and fascinating.

Any surprises?

I was quite surprised to see that very few large banks seem to be prepared for how open banking can affect their businesses.  By “open banking” I mean the process by which banking data can be shared through secure open APIs so that customers—both individuals and businesses—can more effectively manage their wealth.  These open APIs would allow third-party developers to create additional services and tools.  The potential benefits of open banking are substantial: improved customer experience, new revenue streams, and a sustainable service model for traditionally underserved markets.

I believe that the future of banking is encouraging productive competition amongst financial service providers, sharing data securely and giving consumers more options when it comes to managing their wealth.

What’s next?

If I were to read the room a little bit here, my three key impressions after the conference are these:

First, I would say that many are cautiously optimistic in their outlook for 2019 and 2020.  The prospect of trade wars presents barriers to global growth, while higher interest rates and rising labor costs will also negatively impact both corporate profits and economic growth. I think we can anticipate slower growth in the months ahead, but growth nonetheless.

Second, financial institutions around the world are facing growing competitive pressure to make major strategic investments in technology, particularly in AI and machine learning, so look for that to continue and intensify.

And last, technology is fundamentally changing the physics of financial services. It’s weakening the bonds that have held together the various parts of financial institutions, opening the door to new operating models and ushering in a set of competitive dynamics that will reward institutions focused on the scale of and access to data and their ability to serve customers individually.

 

Photo courtesy of RiskMinds2018

 

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