Financial Services Ireland

Now, Next, Beyond series

The CRO Agenda – navigating the pandemic and beyond

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When crises such as Covid-19 hit, the Chief Risk Officer sits at the centre of the storm, advising management and the board as they assess and navigate risk impacts and opportunities on a real time basis. This is happening in the shadow of prolonged financial and non-financial disruptions, high expectations around support of the extraordinary governmental response programs, and a strained risk and control environment.

The CRO also plays a significant role in providing risk oversight of ‘return to the office’, adjustments to business and product strategies, as well as how to shift the long-term view of risk management as the financial services industry prepares for prolonged economic uncertainty and a reimagined operating environment.

The unprecedented impacts of the pandemic have challenged previously held assumptions around plausibility and severity with a number of external and internal risk drivers in play simultaneously.

Leading firms have instituted “pre-mortem” reviews of how risk, compliance and control tools and processes have performed – leading to decisions on key capability upgrades needed in a post Covid-19 world.

Now, Chief Risk Officers are focused on:

  • Accelerated oversight and management of known and emerging financial and non-financial risks and documenting risk acceptances
  • Heightened governance over agile product development and the provision of services via atypical channels

Next, capabilities developments include:

  • Enhancing internal models to incorporate concurrent internal and external risk drivers
  • Aligning strategy, risk appetite and capital allocation plans to allow for agile adjustments to evolving priorities

And beyond, we see CROs:

  • Developing multidimensional scenarios and conducting regular simulations to anticipate, prepare and test for large scale crises
  • Leveraging digital, technical and AI capabilities to create dynamic early warning system and continuously refine risk mitigation actions

Watch our short video above which summarises the key issues on the CRO agenda as they navigate the pandemic now, next and beyond. You can also review our latest insights and thinking to support you in leading through these volatile times; don’t hesitate to reach out if you have any questions.

Fidelma Clarke

FS Partner, Sustainable Finance Consulting
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