Insights from the CRO Livestream

On May 14, 2020 SRA Watchtower hosted a livestream event featuring Chief Risk Officers from TD Ameritrade, Bank OZK and WesBanco. Moderated by SRA Watchtower’s Co-Founder and CEO Michael Glotz, this was a relevant and timely event featuring knowledgeable and experienced speakers. The CRO’s answered specific questions about how their firms have been managing this period of pandemic change; how it has impacted people and society; and their firm’s diligence towards what the future holds.

Simply put, the pandemic and policy reaction to it, has produced a perfect storm of risk exposures. The dramatic pace of change and completeness of change is fascinating. There are several commonalities that the speakers shared in answering the moderator’s questions. Employee safety, smooth transition to remote work status and reentry were top priorities. Client concerns and interactions coupled with changing behavior and attitudes emerging from the U.S. public were discussed. Bank risk, talent availability and acquisition of talent in the new environment produced common issue responses. The transformation of the risk function from a ‘quasi-audit, box-checking’ activity to a prominent player being sought for guidance and leadership through the crisis and beyond, were shared.

Patience, slow and deliberate considerations regarding actions being taken amid the chaos with daily and often unanticipated changes taking place, found the three risk leaders in agreement regarding prudence in the approaches taken by their respective firms. Notably, optimism was prevalent. Employees at all three firms, while working remotely, have dedicated hours of their time above and beyond normal routines, performing tasks internally and with clients at exceptionally high levels of professionalism. A no-nonsense approach by all in establishing roles and responsibilities, coupled with cohesion and dedication to working effectively both internally and meeting customer needs, being paramount. Risk professionals are thinking through good risk governance and the impact of tail events taking place all around them.

Risk appetites and tolerances in sync with strategic plans and objectives being impacted produced common and deliberate approaches from each firm in how they are managing these. Overall, the goal is to adjust and meet strategic imperatives while optimizing risk. Identifying specific areas that have the greatest impact on these imperatives while managing and mitigating them in conjunction with risk appetites and tolerances. The overall economy has transformed from A to Z overnight. This has shaken up the foundation of the banking industry. In addition, it has  presented opportunities to address an environment of complacency during the past decade and reshape the industry in positive ways to serve clients, shareholders, and the community.

Clients and the public are seeing bankers positively help them with understanding, compassion, and deeds that they had not seen in the past. Banks have responded well to both employees and clients and are rising in respect and trust throughout society. The panel emphasized the importance of keeping their Boards continuously informed and working with regulators as the pace of change is fast and constant.

Listening and viewing the livestream event will elaborate on each of these takeaways in detail.

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