Financial services qualifications provider the London Institute of Business Finance held a recent webinar entitled ‘What will keep you up tomorrow night?’, which examined the concerns financial firms might be facing in the current environment.
The panel comprised Hanif Barma, Marcia Cantor Grable and Bryan Foss, independent non-executive directors with a background in risk; and Olivier Beroud, a visiting professor at LIBF. Mr Barma and Mr Foss are co-founders of The Risk Coalition,
a network of not-for-profit, professional and membership organisations seeking to raise standards of risk management in the UK.
Ms Cantor Grable mentioned the lack of information security expertise in many firms, and said many firms were left to regret failing to prevent a given individual having access to their systems.
Mr Foss said many company boards had failed to effectively engage with the subject of risk as it was seen as “an overly technical issue”. He added that firms’ senior management can now be held to account for any failings in ways that did not apply in the past.
Mr Foss also said that Covid had forced many firms to adopt a much more digitally focussed model, and that this brings with it additional risks.
Prof. Beroud said that Covid was with us for the foreseeable future, and so it had moved from being a ‘risk’ to an ‘event’. However, he suggested the impact of a severe new Covid variant might be a ‘risk’, i.e. an event which might occur in the future and which would be expected to have an impact on firms’ activities.
Current issues of concern mentioned by the panel included:
- The impact of Covid
- The impact of Brexit
- Hacking and cybersecurity
- The emergence of fintech, possibly leading to customers requiring or preferring face-to-face services being neglected
- Changing demographics
Mr Foss said some firms were actively trying to re-invent themselves using technology, and he was concerned this could lead to client risks, regulatory risks and cyber risks and other resilience issues. In his experience, company boards were “not good at keeping up with changes” in this area.
Ms Cantor Grable said the size of the cyber security risk to firms was “incalculable”.
Prof. Beroud ended on a positive note by highlighting that the pandemic had shown that firms were able to adapt to changing events very swiftly.
Ms Cantor Grable’s final point was to encourage firms to embrace the fact that working patterns and working locations of staff may have changed forever.