The management of financial risks includes credit, market and liquidity risk. These are a risk officer’s bread and butter.
Growing responsibility
Now risk officers also have to cover non-financial risks. These include responsibility for operational, cyber, climate, conduct, compliance, regulatory, reputational, human resources, business disruption, projects, security and financial crime risks among many others.
They also decide how much risk the bank is willing to take: what is the bank’s tolerance for risk, and is a particular project inside or outside that range?
In other words, risk officers are responsible for everything from drunken antics at the office Christmas party to how climate change will affect the company. They are on the hook for state-sponsored hacking attempts and anti-money-laundering failures. And they need to know about it before it happens.
ANZ’s Corbally says although the shifting ground is one of the biggest challenges facing risk officers, it is also one of its key attractions.
“Five years ago, the role of CRO was heavily centred around credit decisions, risk and capital and a somewhat reactive compliance role,” Corbally says.
“The role has now…
