Digital disruption is changing the way we do business and is influencing the approach to risk strategy. Jim Wethey, Head of Risk, Compliance & Conduct at Westpac NZ tells us how digital disruption is impacting the Risk industry and how to successfully navigate the change created through its implementation.
What is digital disruption?
It’s not about new digital products. It is focused upon the use of digital technologies to deliver more compelling products and services to customers faster, and at a lower cost than the competition. The disruptive part is what this does to an established market - it changes the status quo.
Digital disruption is the change that occurs when new digital technologies and business models affect the value proposition of existing goods and services, which poses a risk to any business. Today, nobody can afford to ignore digital innovation.
How is disruption transforming risk management processes and planning?
Technology is evolving at a rapid rate and organisations constantly have to adapt. Successful disruption involves the elements of surprise and speed.
This doesn’t allow for much time to assess risk and we are witnessing a low tolerance for risk assessments to slow business process down. Existing operating models encourage different departments to work together throughout the duration of a project. Risk management teams must be visible and part of this collaboration - they should be at the cutting edge, along with the project team, to the change created by digital disruption.
To effectively move forward with Risk, we’re retiring the old project waterfall approach, introducing flexibility and informality to meet the principles of Agile.
How can we leverage these opportunities?
The cornerstones of risk governance remain pertinent but culture will need to change to allow for successful digital disruption. Integration of new platforms, people and strategies will be easier if the company’s culture is attuned to and supportive of innovation.
Digital disruption is delivering innovative products and services at a pace we’ve never experienced before. Risk management must be adaptable and flexible in this new environment.
In this day and age - digital is a job for everyone.
It is now more important than ever to ask the “what if” questions as there will be more risks to assess and control whilst dealing with a generation of people who will likely have a higher threshold for risk taking.
Jim has extensive financial institution experience across all areas of finance. He now concentrates on institutional and business banking given the significant amount of change and regulatory engagement impacting those areas.
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