Turning a Solid Risk Management Framework into a Competitive Advantage

Too often, banks – and their employees – think of traditional risk management teams as the heart of your organization’s defense. After all, aren’t they the ones responsible for making sure you follow the rules, mitigate risks and fix things when they go wrong (especially when it’s a big regulatory issue)?

If that’s your mindset, you’re shortchanging your bank by pigeonholing risk management into one area – when ideally every single employee should play an active role. In fact, establishing an enterprise culture that embraces risk management creates a competitive edge for your bank.

In a recent American Bankers Association podcast, I spoke with Ryan Rasske, the ABA’s senior vice president for Risk and Compliance Markets, about how to position your bank for success in the current risk landscape. 

We covered three key topics during our 10-minute conversation: 

• The impact of 2020 on how organizations approach risk: As vaccines allow people and companies to transition from safer-at-home conditions, banks are preparing for the “next normal,” and the downstream implications of employees coming back to the office. Concurrently, continued low interest rates and their accompanying tight margins are leading to new markets, continued emphasis on digital transformations and a push for innovative offerings. 

• Why it’s critical to get risk strategy right: Take one wrong step and you’re putting customers, your organization and the brand at greater risk. And with early signs of renewed regulatory focus from the Biden administration and the Consumer Financial Protection Bureau (CFPB), bankers cannot risk the time and effort associated with a regulatory ding.

• How your board and senior executives set the tone: Saying a risk-aware culture starts at the top isn’t lip service. When leaders speak loudly and model those behaviors, this culture comes to life across the bank. Your leaders must underscore that all employees have roles and responsibilities to protect your bank from risk, including speaking up when they identify gaps and working collaboratively on remediation.

The Client Benefits

It’s never been more important to have a robust framework for how your bank manages risk, whether in pursuing a new business opportunity or ensuring regulatory compliance. Listen now for essential insights on what to consider and why a risk-aware culture matters.