Season 2 | Ep. 23: How Service Credit Union Created a Proactive Risk Culture

In this episode of the Risk Intel Podcast, Tyler Pihl, VP of Enterprise Risk at Service Credit Union, joins the show to share his journey and expertise on building a proactive risk culture.  Tyler highlights the evolution of ERM at Service CU, the importance of communication and relationships, and the continuous effort required to maintain a robust risk management framework. Watch or listen to the full episode or read the key takeaways from this enlightening discussion below.

Transforming ERM into a Value-adding Function

Tyler Pihl began his career in public accounting, earning his CPA license and gaining valuable experience before transitioning into the credit union industry. Initially working in internal audit, Tyler eventually moved into Enterprise Risk Management (ERM), bringing a wealth of knowledge and a fresh perspective to the field.

At Service Credit Union, the ERM department underwent significant transformation. Initially, the department employed a bottom-up methodology, which provided a solid foundation but fell short in addressing risk holistically. Recognizing the need for change, Tyler set out to evolve the ERM program from a box-checking exercise into a value-adding function. By incorporating a top-down risk culture, he was able to complement their bottom-up efforts and align risk management with the organization’s broader strategic goals.

The Importance of Relationships and Communication

A key theme in Tyler’s approach to ERM is the importance of building and maintaining relationships across the organization. He points out that engaging senior leadership and understanding their perceptions of risk is critical in gaining buy-in. Tyler notes the importance of tailoring communication to the audience, whether it's formal presentations for senior management or informal discussions with his operational teams.

Securing buy-in from senior management and the board is essential for the success of any ERM initiative. Tyler highlights that continuous engagement and demonstrating the value of ERM are key to maintaining this buy-in.

“It's about showing how risk management efforts align with organizational goals,” he explains.

Crafting and Implementing Risk Management Strategies

Developing detailed risk appetite statements with specific examples helps clarify the organization’s risk tolerance. These statements provide a framework for decision-making and are regularly revisited to ensure they remain relevant. Tyler underscores the importance of these statements and how spending time to really get them right at the onset will help guide the organization’s overall risk management strategy.

The development of key risk indicators (KRIs) and key performance indicators (KPIs) is also fundamental to effective ERM. Tyler advises starting with existing departmental measurements and then supplementing them with standardized metrics found in their ERM Platform.

“Utilizing tools and technology to manage and analyze risk data is crucial for scalability,” Tyler says.

A System like Watchtower can help reduce the manual burden and enable consistent reporting and benchmarking.

Overcoming Challenges and Future Vision for ERM

One of the biggest challenges in adopting an ERM platform is ensuring continuous stakeholder engagement. Tyler mentions the importance of tracking login frequency and system usage to assess who is actively involved and playing a supportive role in driving a positive risk culture. Keeping the ERM program relevant and integrated into daily operations is essential for its long-term success.

Looking ahead, Tyler’s vision for ERM at Service Credit Union focuses on staying relevant and continuously adding value to the business. He emphasizes the need to adapt to changing environments and ensure that risk management efforts are aligned with organizational goals and stakeholder needs.

“ERM should be a dynamic process, constantly evolving to meet new challenges,” Tyler concludes.

Final Thoughts

Tyler Pihl’s insights provide a comprehensive overview of the complexities and rewards of managing enterprise risk. His emphasis on relationships, communication, and continuous improvement offers valuable lessons for any organization looking to strengthen its ERM framework. He and the Service Credit Union team are setting a great example for their peers on why it's important to invest in building a culture of risk.

By evolving practices and staying engaged with stakeholders, organizations can effectively navigate risks and align their strategies with their overarching strategic goals. For a deeper dive into Tyler’s journey and his approach to ERM, listen to the full episode of Risk Intel Podcast below. His expertise and practical advice make it a must-listen for risk professionals in the field.

Stay tuned as we bring back Tyler on the show to discuss how they created effective risk appetite statements.