Hong Kong’s financial institutions need skilled workers to improve risk management

What’s your talent pool got to do with it? Everything

PUBLISHED : Saturday, 30 September, 2017, 9:00am
UPDATED : Saturday, 30 September, 2017, 9:00am

While large financial institutions have made progress applying smart technologies like cloud, biometrics, and big data analytics to their risk management functions, 66 per cent of executives say skills deficiencies are impeding the effectiveness of the function as these technologies evolve, according to a recent study by Accenture.

You can throw technology at problems but if you don’t have skilled workforces to utilise the tech, you have a problem.

The study, which is based on a survey of 475 risk management executives in the banking, insurance and capital markets sectors globally, also found that 73 per cent of executives cite an increase in the “velocity, variety and volume” of data as impeding the effectiveness of their risk management functions. We may have more data points at our fingertips, but if we cannot aggregate them meaningfully it’s a missed opportunity and a potential liability.

This underscores that as the nature of risk becomes more diverse and the amount and quality of data explodes, the need for the skills to bridge core risk management and new technologies is more urgent than ever.

Take the time to find the right talent and integrate them

Since the 2008 financial crisis, the world has changed dramatically. Previously, financial institutions responded to regulatory and control issues by adding talent. Now they must pivot to increase the skills of their talent to keep pace with new realities of data and technology. While technology cannot replace experience and good risk management discipline, the risk teams that will be most effective at integrating technologies like big data to recognise patterns and test hypotheses will be the ones that are best positioned to outperform their peers.

According to the survey, 69 per cent of executives believe that a shortage of skills in new and emerging technologies is hurting the risk function’s effectiveness. Only 10 per cent said their risk teams have the internal resources needed to carry out the functions they are asked to perform.

So what’s the solution?

Take the time to find the right talent and integrate them. You need a workforce that has both traditional risk assessment experience and can work with new technology. Bringing these skills together from different parts of the organisation, or recruiting “data scientists” to work alongside risk professionals is increasingly an option companies are choosing. Given the scarcity of talent, looking outside the existing workforce to extend or enhance the team is also an option, particularly in areas such as technology implementation, risk reporting and risk measure calculation.

It is critical that financial service managers stay ahead of the next wave of risks – whether operational, financial or technological. This requires a continuous evolution of the risk function, and only companies that put in place the right risk capabilities will be best positioned for growth.

Steven Culp is senior managing director of Accenture’s Finance & Risk practice for Financial Services