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The evolving role of risk and how it drives value

April 14, 2014

IBM Smarter Risk is a new approach to enabling organizations to build trust and value amidst uncertainty. At The Evolving Role of Risk Forum at the IBM Client Center in New York City, an event co-hosted by Risk magazine and risk.net, close to 50 CROs and risk management leaders came to learn how Smarter Risk can help them transform their organizations.

graphic for AR risk driving value blog post.pngThroughout the event, client conversations confirmed that managing risk is growing more difficult—and more strategically important. In many organizations, different types of risk are managed by different groups which often lack easy and efficient ways to share their findings. Yet risks don’t occur in isolation. In fact, they’re more interconnected than ever. Our research shows that 42 percent of the top 100 losses since 2007 have been boundary events involving credit risk, market risk and operational risk.

Smarter Risk provides access to the full range of IBM solutions and services that enable organizations to manage operational risk, financial risk, fraud & financial crimes, and IT & security risk. Smarter Risk helps clients develop and execute a strategy that takes a holistic approach to these critical issues.

The evolving role of risk

Speakers at the launch event came from Citigroup, Morgan Stanley, RBC Capital Markets, RBC Citizens, N.A., GE Capital, Skybridge Capital and insurers New York Life and XL Group.

Sanjay Sharma, chief risk officer of global arbitrage and trading at RBC Capital Markets, described the importance of reaching beyond regulatory requirements and using risk management to improve business performance and add value.

Gideon Pell, chief risk officer of New York Life, spoke to the opportunities and challenges of taking a holistic approach to risk governance, and why it’s vital for organizations to apply risk analytics and embed risk management in their culture and decision-making.

IBM experts on risk management emphasized how big data and analytics are impacting risk management. They also updated participants on how IBM is enabling enterprise risk governance so that clients can experience greater trust across their risk processes.

Wayne Wilczynski, VP, IBM GBS risk management and regulatory compliance, led a panel discussion on ensuring an integrated, holistic approach to managing enterprise risk.

I took part in a wrap-up panel with Peyman Mestchian, managing partner at Chartis Research and Luke Clancy, an editor and contributor to Risk.net. We agreed that, during the day, we had heard three important themes emerge:

  1. Economic and political volatility are making risk management more critical to an organization’s viability.
  2. Organizations are facing pressures both from regulators and from consumers, empowered through social media.
  3. Analytical tools and technologies exist for understanding various kinds of risk and, even though creating a cohesive whole view from disparate parts is a challenge, some organizations are making great progress in doing so.

Chartis Research is in the process of conducting an extensive study, “The Risk-Enabled Enterprise,” sponsored by IBM. The first report from this study is now available.

I’ll be speaking next month at Vision 2014 in Orlando, an event which has an entire set of sessions focused on risk analytics. If you have responsibility for risk, or know how important it is to your organization, join us there; attendees will have direct access to IBM experts in risk management for discussion and conversation.

Also, in June, IBM will be part of the Gartner Security and Risk Management Summit 2014, to be held near Washington, DC.

In the meantime, you can follow the latest on risk management from IBM experts and others on our new Smarter Risk website and dig into the topics listed below to learn more about the breadth and depth of what IBM offers risk management professionals:
 
· See how big data and analytics helps manage risk
· New IBM offering helps combat fraud and financial crimes
· Find out how IBM General Business Services supports efforts to combat financial crime and manage risk
· Services for IT risk and security 
· Products for risk analytics