I came across this article from McKinsey and Company titled The Future of Bank Risk Management.  It is very good (in particular the Executive Summary from the full paper which can be downloaded) and most of what it says is applicable to any industry.

First it makes the case for better data analytics, in real-time, for automated risk assessment and decision making and/or accelerated human decision making.

Second it says risk management will become more strategic and collaborate more and more with the business as customer demands will require speedier service while regulators require no degradation in risk profile without consequences for capital holdings.  This can only come from real-time analytics.

Third it encourages banks to put enablers in place now to meet the future demand.  These include “high-performing data infrastructure” and “embedding a risk culture”.  They also suggest “Data scientists with advanced mathematical and statistical knowledge will increasingly need also to be able to work as ‘business translators’”.

This third point is key.  Embedding a risk culture takes time.  It requires risk professionals with advanced communication skills to translate risk speak to business speak and to become trusted advisors to business leaders who then lead by example.  Remember, it is not what a leader says that is important, it is what they do.

For more on enhancing your communication skills read my paper, Risk Leadership: How to be Heard, here or watch my webinar on it here.

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