Insights from the American Bankers Association’s Risk 2021 Conference

In late March, several Spinnaker team members participated in ABA Risk 2021, both as panelists and attendees. This premier risk conference from the American Bankers Association combines enterprise risk management, insurance risk management and risk quantification, while delivering expert takes on current and emerging threats along with best practices.

We asked Elizabeth Snyder, senior director in our Risk Management and Regulatory Compliance practice; Rick Jaros, practice lead for Customer Channels and Operations Management; and Jack Gooding, director in our Business Analytics and Data Management practice, to share a few of their observations and learnings.

What were your key takeaways from the conference?

• Elizabeth: The pandemic revealed risks are more interdependent and interconnected than we thought. This single event impacted multiple risks from cybersecurity, operational, human capital and third party, to name a few. A risk interdependency map is an important tool to ensure risk professionals strongly understand their organization’s standing.
• Elizabeth: Enterprise risk management must become an agile process for institutions to continue to succeed. Being adaptable and resilient is crucial for financial institutions to compete with emerging non-traditional businesses.
• Jack: Even in a rapidly shifting risk environment, strategic corrections should be driven by data analytics, machine learning, robotic process automation and the like to ensure sound risk management decisions.
• Jack: Foreign adversaries are actively trying to breach our cybersecurity defenses. While this might seem abstract and theoretical, we should treat this risk as we treat physical threats.
• Elizabeth: Expect continued scrutiny on models, particularly non-credit models such as fraud risk or customer insights, which are significant for regulator concerns over UDAAP/Fair Lending.
• Rick: Just how critical people strategy is to risk management. COVID completely upended our work environment, unlike anything that we have seen before.

We understand you all participated in panel discussions. Can you share the main takeaway for those who might have missed your session?

Jack: Most financial institutions could benefit from automating their manual control testing. In doing so, they would achieve better standardization, allow for the entire population to be tested and see results almost instantaneously. Partner with your bank’s data experts, who can help you construct an automated control testing approach by ensuring appropriate data quality practices are in place, building the testing process and developing reporting for various stakeholder groups.

Elizabeth: Even as we move closer to a post-pandemic environment, many banks are still operating under the policies and procedures put in place when they sent knowledge and contact center employees home to work more than a year ago. The world is different today, and banks need to ensure the structures they have in place reduce risks they probably never considered on such a global scale. They need to review and update their policies to protect their customers, their employees and their organization. But they should also adopt a common-sense approach that balances the need to remain competitive and profitable with the evolving perceptions and needs of those different audiences.

Rick: We discussed how complex moving from an in-person call center environment to a distributed environment was. The level of detail and continued effort to manage this was and continues to be immense. Additionally, going forward the complexity is most likely here to stay. If anything, it will only become more complex as financial institutions look to manage a hybrid (in home and in office) solution.  

All sessions remain available on demand for conference registrants until May 31.

Jack: “Look Before You Leap: Considerations in Control Automation”

Elizabeth: “Reviewing Your Risk Policies and Procedures in New Environment”

Rick: “Fortifying Your Risk Management Activities in Digital Channels/Call Centers,” one of three sessions moderated by Spinnaker’s Cara Williams, practice lead for Risk Management and Regulatory Compliance.

 What’s the most surprising thing you learned?

Jack: I sat in on the session by Catherine Mann, Citibank’s global chief economist, titled “State of the Industry,” where she spoke about how inflation anxiety is a bigger threat to our economy than inflation itself. I found that interesting, as an example of perception being more impactful than reality.

Elizabeth: Though it wasn’t surprising, the conference confirmed that climate change and Environmental, Social and Governance (ESG) Risk are quickly evolving and will soon impact all institutions, regardless of size. Given its growing importance, risk professionals need to ensure climate change and ESG risks are fully integrated across your entire risk management framework.

With the financial industry bracing for intensified regulatory oversight, an unflappable risk management program is the bare minimum for any bank. As industry veterans, our Spinnaker team has been on those front lines, and we share that expertise directly with clients, as well as through top industry conferences like ABA Risk 2021. We’re here to help provide the latest industry insights on risk management and the technology to enhance your bank’s practices.