March 21, 2023
Acin named Best Operational Risk Management Partner by CFI
Technology and innovation are disrupting the world we live in and pushing the envelope on what can be achieved today. That same disruptive thinking can and should be applied to the risk and controls space in order to manage and mitigate operational risks in a more innovative way. In the latest edition of the Women in Risk and Control webinar series, host and WiRC founder Rupal Patel was joined by Ian Hollowbread, Director for Global FinTech at ING, Rita Martins, FinTech Partnerships Lead for Finance and Risk at HSBC and Colin Bennett, Head of Digital Distribution at GAM Investments, to discuss why risk professionals need to embrace innovation and how they can make it work.
Here are five key takeaways from the webinar:
1. Innovation drivers
The rise of AI and other disruptive technologies is creating a backdrop of ‘unknown unknowns’, says Bennett, making traditional risk assessment processes inadequate. That means risk professionals need to start thinking more innovatively about managing new and emerging risks. Martins says HSBC has divided its innovation program into three different time horizons—the first being the incremental changes that can be made using existing tools and then the second and third is using tech that is new to the bank and new for the market. Disruptive innovation is the term used by both Bennet and Hollowbread to describe technology that is disrupting the market by delivering platforms that solve problems through centralization and coordination—for example, while incremental innovation augments existing processes with technology.
2. Getting projects off the ground
A frequent mistake people make is to go straight to the solution, says Martins, but it is important first to understand what the problem is you are trying to solve. Once that is fully understood, you can then look for a solution—can it be solved with existing tools or will it require a new external solution? To encourage colleagues to think about innovation and the ways technology could help improve existing processes and workflows, Martins says HSBC hold demo days or events with FinTechs to show the ‘art of the possible’, potentially sparking new ideas and getting people thinking with a more innovative mindset. Collaboration is also essential for getting ideas from inception to implementation, says Bennett. GAM have idea champions across the business—known as ‘GAMbassadors’—who help keep ideas moving through to completion.
3. Avoiding SOFAs
All three firms have introduced idea hubs that encourage all staff members to submit innovation ideas to avoid what GAM’s COO Steve Rafferty calls SOFAs—the ‘same old faces’ being relied on all the time to come up with suggestions. Bennett says GAM’s recently launched Idea Drop platform—what he calls an ‘Instagram for Ideas’—has democratized the innovation process and created a network effect where people are empowered to share their ideas, either in person or anonymously.
Hollowbread says ING uses business model canvases to help people get their ideas out of their heads and down on one page in a way that allows the organization to rapidly assess the viability of those ideas. “We go through a whole series of stage gates to ensure that it is fit for purpose,” he says. “That really allows us to move and progress these things at speed.”
4. Why diversity matters
Martins says diversity of teams is essential when working on innovation projects—not just in terms of gender but also in backgrounds and skillsets—to ensure those projects are a success. HSBC has also been increasing its focus on bringing diverse groups into conversations with senior executives to raise awareness and start a dialogue around what can be done to make the bank more inclusive, she says. For Bennett, diversity of thought is also essential for creating sustainable change, while Hollowbread says ING is piloting an employee platform that allows people to talk freely and anonymously to help accelerate diversity across the business, recognizing that not all cultures are the same this gives everyone a voice without disrupting cultural norms.
5. Get involved…
As Bennett says, it’s people that make change happen—so getting involved in innovation is essential. That also means not being afraid to speak up and share ideas. Bennett says when GAM rolled out its Idea Drop platform, there were fewer ideas being shared from colleagues in Asia Pacific. Once they were encouraged to contribute, the ideas started rolling in. “You have to tune into it and understand it and make those changes in order to facilitate the ideation process,” he says. Martins says it is also important to just immerse yourself in as many opportunities as possible, whether that is training sessions or conferences, to understand what is out there. And, crucially, not to get discouraged if your ideas are overlooked. “Innovation can be quite challenging, and it doesn’t always work,” she says. “But even if it doesn’t work you have learned something, so just get involved.” Hollowbread added “my biggest learnings came from the industry, so get yourself out there, understand what’s happening across the industry, you know what’s happening across your business and then take it forward.”
Click here to watch the webinar.