Risk Vision 2020

Raj Singh, Chief Risk Officer Annual Round Table of CROs - Copenhagen 2016

April 15th

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Standard Life - An increasingly global presence

and strong strategic partners

We administer over £307 billion. We support around 4.5 million customers and

clients across the globe – through our operations in the UK, Europe, North

America, Asia and Australia.

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Evolving Risk Management in conjunction with

the Business

The 2020 Risk Horizon…

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Rapidly Changing and

Uncertain Environment

Increasing Regulation

Embedding

Risk Culture

Developing

Technology

Low Yield

Environment

Staying Ahead

of the Pack

The 2020 CRO’s Response…

Evolving & Increasing Regulation

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Evolving & Increasing Regulation

Environment more complex -

many businesses have multiple

regulators

Regulatory future moving

towards ‘principle based’

regulations and focusing on

customer outcomes

Regulatory environment more

demanding and intense –

thematic reviews, governance

Support with open and transparent

relationships with regulators

Need to balance time spent on regulatory

activities and supporting future business

growth and performance

Management of conduct risk needs to

focus on customer outcomes and putting

customer at the ‘heart’

Time spent on regulatory activities and supporting the future growth and

performance of the business must be balanced

Cyber & Developing Technology

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Cyber & Developing Technology

Technology oversight reviews provide key

insight and management of the risks technology

brings

Risk appetite for this needs to be articulated

and approved by the Board

Cyber risk event tree and penetration testing

are key tools

Technological change is moving

at a rapid pace:

FinTech Rise

Blockchain

Robo Advice

Data, security, cyber risk are

exponentially increasing

External diagnostic is crucial

Risk assessments need to capture technology

leaps and FinTech developments as well as

legacy systems

Exploration of future opportunities and maximising current market

footprint is needed to stay ahead of the curve

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Emerging Risks & Being Competitive

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Emerging Risks & Being Competitive Pre-emptive and pro-active risk management is required to stay on top of

this

Need to be thinking outward and forward;

investment in forward horizon scanning Risk of becoming uncompetitive very

quickly if emerging and business

disruption risks are not managed

Engage with the change and get out in

front to set the direction of travel

Competitors and regulators are

rapidly changing and disrupting the

environment we operate in

Strategic and pre-emptive 'Business Risk

Reviews' and 'Technology Reviews' will

support business growth objectives and

new risk areas

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Risk Management in Unchartered Economic Waters

Risk Management in Unchartered Economic Waters

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Robust forward capital planning and

investigating and understanding such

risks for your business is primary

Over the horizon we face the same

challenges again - global market

volatility, product guarantees

Insurers with long-term liabilities will

invest in a wider set of asset classes

e.g. trend seen in infrastructure debt

CROs & Risk need to be cognisant of any

gradual move up the risk/yield curve

What next – quantitative easing

hangover?

Compressed low yields and

where to for returns – by 2020

will it be any different ?

Appropriate capital reserves and valuation of risks under this broader and

increasingly uncertain set of outcomes is crucial

Business model and product design

needs to be able to flex to take account

of these challenges

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Are we ready?

Risk Culture & Conduct

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Risk Culture & Conduct Embedded and measurable risk culture that champions client/customer

focused outcomes

Leaders need to promote risk

culture with a strong ‘tone from the

top’

The right risk culture needs to

be embedded to have the

desired impact on business

performance

Place the ‘customer at the heart’ in

all that you do

Focus on ensuring a good culture is

‘being lived’ Measurement and management

of risk culture is complex

There is a need to achieve ‘fair

outcomes’ for customers Conduct MI should demonstrate

customer driven actions and

experience

The 2020 CRO Helps The Business Navigate The

Journey

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CRO’s Influence

Needs To Be Present

In All Parts Of The

Journey

Demonstrates

Independence

Guides

Challenges &

Supports

Staying Ahead

of the Pack

The 2020 CRO’s response…

Put in place the right people and processes; outside

challenge and continuous reskilling is needed

Enable the pace of the business to move faster and innovate - facilitating

opportunities to be seized but also providing caution when required

Provide insight and challenge of where the ‘moving

landing strip’ is going to be before take-off

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…get their business living in the future

Comments

Questions

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