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Risk Rebooted - 8th Annual Cass-Capco Conference

The 8th annual Cass-Capco conference Risk Rebooted took place at The Barbican Centre, London.

The Cass-Capco Risk Rebooted Conference took place at the Barbican Centre, focusing on the latest thinking currently shaping the risk landscape with a high-profile line up of leading academics and senior risk professionals.

Part one of the morning’s sessions included experts in conduct, reputational and regulatory risk, talking about the urgent issues facing financial institutions right now.

The first speaker to address the conference was Eduardo Epperlein, Managing Director of Nomura International, on The fundamental Review of the Trading Book (FRTB): what are the real issues?

His posed the question, with banks once again under the spotlight from the Basel Committee, how can institutions manage and limit their exposure? Epperlein responded with an in-depth exploration of risk and regulation, as well as discussing the subsequent changes to models.

Epperlein said, “With conflicting requirements, internal models become more complex. Risks have unintended consequences, so we always need to test them.”

Robert Thacker, Chief Risk Officer EMEA at FIS spoke about Reputational Risk and how banks have succeeded – and failed – to protect their customers as well as their brands.

Thacker said, “Reputational risk is created when performance does not match expectations. 25% of a company’s market value is directly attributed to its reputation, and reputation can be affected by decisions and performance across a range of areas, including financial performance, quality, ethics and integrity, crisis response, risk management and security.”

Regulatory Risk was the final session of the series and was given by Philip Booth, Professor of Insurance and Risk Management at Cass.

He spoke in detail about the importance of understanding regulatory policy. He also argued international regulation, by its nature, had evolved in its level of complexity, but this change was not necessarily beneficial to those who need to understand it.

Booth said, “Complexity begets more complexity. You get to a situation where only the experts understand regulation, leading to a situation where it is not possible for regulators to be held to account by politicians, by the democratic process, or even academics - indeed, anybody who is regulated.”

After a short break, Managing Director of CMS Motor Sport Ltd, Mark Gallagher talked about Formula 1 and the Risk at the Cutting Edge of Performance.

Gallagher said, “Complacency is the biggest enemy in Formula 1. The FIA continues to enforce and reinforce regulation around safety and there is constant rewriting within our regulatory environment, for example, the introduction of the virtual safety car. We cannot prevent incidents, but we can mitigate the outcomes.”

The second series of plenary sessions focused on a digital future, and exploring the opportunities in the era of crypto currencies, blockchain, cybersecurity and other emerging technologies.

Nicolas Courtois, Senior Lecturer in Information Security and Codebreaker from UCL discussed Bitcoin: a cryptographer’s dream. He was followed by Founder of Epiphyte, Edan Yago, who explored the impact of blockchain and crypto currencies on the risk industry.

Third was Steve Stalnaker, Founding Director of VEN. VEN started in the virtual world, on the social media platform Hub Culture, and later became the first digital currency in 2007 as well as begin trading in regulated Forex markets in 2014.

The last plenary session of the day was led by Wade Murray, Chief Innovation Officer at Capco. His talk, Digital currencies in a regulated world took a more creative and consumer-led angle to the challenges facing risk and regulation in the time of digital economies.

Murray said, “Globally, millions of dollars are flooding into digital currency and the blockchain space. The traditional currency model is changing. Take how we interact with our phones now. In five years’ time, that experience will look and feel vastly different and it’s the same for currency.”

Presentations available here: http://www.capco.com/insights/events/risk-rebooted

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