Insignia Financial’s chief risk officer (CRO) sheds light on why the “multidimensional” risks of operating a financial advice licensee requires a holistic and curious approach.
As the CRO of one of Australia’s largest advice firms, Anvij Saxena is responsible for overseeing all aspects of enterprise risk management and compliance at Insignia.
According to Saxena, the skills and knowledge gap within the risk profession continues to grow as new forms of risk present themselves which were previously unheard of in the past.
Echoing the CRO, Kaizen Recruitment recently shared that as persistent regulatory changes continue to drive demand for risk and compliance teams in financial services firms, competition is heating up in the shallow talent pool.
“We forecast the shallow skill sets of risk and compliance professionals, particularly in superannuation and funds management, will continue into 2024 as organisations compete for niche skill sets as they all mirror the same scaling in preparation for regulatory changes impacting business,” the firm’s February market update wrote.
Saxena added that the current risk landscape transcends past conventions. The underlying risks of operating an advice practice have become highly multifaceted and multidimensional, therefore requiring a new approach.
“Cyber threats, accelerating regulatory change, environmental and geopolitical instabilities [now] interweave, creating complex scenarios that impact businesses on multiple fronts. This demands a rethink of traditional risk management approaches.
“We need to cultivate a workforce that is not only technically proficient, but also agile, innovative, vocal and capable of thinking outside the box. These are skills that haven’t always been attributed to the risk management professional,” he elaborated.
The CRO highlighted two recommendations for current and future risk professionals: thinking holistically and remaining curious.
“We’re seeing risks that are more interconnected than ever before. Cyber security, for example, is more than a system security issue. It impacts data risks and controls, which carry privacy, and financial crime considerations. Ultimately, there is a risk to franchise value and reputational impacts. An IT-driven focus to cyber risk for example won’t be enough.”
In November last year, ASIC called out organisations’ “alarming” cyber security deficiencies. The regulator revealed that just 44 per cent of participants it surveyed at the time did manage third-party or supply chain risk.
Saxena also emphasised why future risk professionals need to utilise a curious mindset towards risk, but should be competent enough to push the boundaries of what tech and data can do.
“The risk professional of the future is one that can connect dots to provide better advice, counsel and foresight to businesses so that decisions are executed confidently.”
He concluded: “It’s clear that the role of risk management is evolving from a defensive posture to a strategic, forward-looking function. By embracing change, fostering innovation and understanding trends, risk professionals are becoming increasingly critical in helping businesses make more informed strategic decisions.”
