The role of risk management has never been more critical. The rapid pace of change, fuelled by technological advancements and global interconnectedness, has transformed the risk landscape, presenting new challenges and opportunities for businesses to grapple with. In this opinion piece, Anvij Saxena, Insignia Financial's Chief Risk Officer, shares his insights on adapting to these changes and positioning risk management as a strategic enabler for businesses.

“The skills and knowledge gap within the risk profession is widening as we confront new types of risks that were almost unheard of a decade ago," Saxena notes. Reflecting on the evolution of risk management, he adds, “In the past, it was an environment primarily driven by compliance obligations and risk frameworks. The role of a risk professional was largely one of holding the mirror up to the business, providing insights on risk exposure and how these were being managed.”

Today's risk landscape transcends past conventions, Saxena observes, “Risk is now multifaceted and multidimensional. Cyber threats, accelerating regulatory change, environmental and geopolitical instabilities interweave, creating complex scenarios that impact businesses on multiple fronts. This demands a rethink of traditional risk management approaches. We need to cultivate a workforce that is not only technically proficient, but also agile, innovative, vocal and capable of thinking outside the box. These are skills that haven’t always been attributed to the risk management professional.”

Curiosity a key character for the future risk professional

Emphasising the future direction of the profession, Saxena explains, “The future risk professional will have a curious mindset but will also be competent and comfortable to push the boundaries of what technology and data can do to help businesses innovate with a competitive edge. The risk professional of the future is one that can connect dots to provide better advice, counsel, and foresight to businesses so that decisions are executed confidently.”

Saxena emphasises the importance of fostering a culture of continuous learning and development within risk teams. “Professional development is key, including training our people on soft skills like curiosity. It’s one of the most important professional traits because it promotes ongoing learning which enables professionals to better adapt to constant change.”

Integrating risk with business decisions and culture

The causal nature of today's risk environment also requires a holistic approach. “We're seeing risks that are more interconnected than ever before. Cybersecurity, for example, is more than a system security issue. It impacts data risks and controls, which carry privacy, and financial crime considerations. Ultimately, there is a risk to franchise value and reputational impacts. An IT-driven focus to cyber risk for example won’t be enough.”

Saxena also highlights the value of diversity within risk management teams. “Diverse perspectives breed innovation. By bringing together individuals from different backgrounds and disciplines, we can tackle complex problems more creatively and develop optimal risk mitigation strategies by tapping into a vast pool of experience and knowledge. We also need to look outside the industry of risk professionals for solutions.”

It's clear that the role of risk management is evolving from a defensive posture to a strategic, forward-looking function. By embracing change, fostering innovation and understanding trends, risk professionals are becoming increasingly critical in helping businesses make more informed strategic decisions.