The 1282 Day Journey - Perspectives

The last couple of weeks of December are special...always. The festive mood sets in, the weather in Singapore is just great and the need to slow down, unwind and recharge batteries for the new year becomes compelling..almost like a calling.

Sitting down to write this blog made me go back to the date i started my journey as an entrepreneur. 1282 days would have passed by the time we flip our calendars to 2015. "Be careful of the first 3 years. They are critical. if you can survive that long, there is no looking back". This comment was made by a couple of my well wishers who had been down this track. The 1000 day mark as some others put it....is a key milestone in the entrepreneurship journey. When i first heard them my instinctive reaction was...hmmm ok, lets see.

Today, I tell new, budding, aspirant entrepreneurs the same thing...."you need to give it a 1000 days". The relevance of this only sinks in as you start sticking your neck deep into your work and go through the journey and the seasons - winter, spring, summer, autumn. The seasons come and go and you learn to adjust and ride these out. There is no consistency, you do get the occasional storm but you also have wonderful weather for a large part of the year. What keeps you going is the realisation that winter will turn into spring one day....be patient, consistent, have the faith and keep at it. Not easy, let me assure you.

What has helped me? Strong family support, patience and motivation. Our strategic partners, network and friends. My faith, that has guided me through the seasons, taught me to persevere no matter what and to do so with a focus on just on myself but also people around me whether they are business partners, clients, consultants, employees or family, friends. I am a practicing Buddhist who has embarked on a journey to improve my life along with the life of others around me through the practice and the teachings of Nicherin Buddhism.

My practice and faith has helped me immensely on the work and personal front. From realising my own inner potential to dealings with people and influencing change in their lives directly or indirectly is a great source of joy, satisfaction and comfort. Strange as it may seem, this is real. I wanted to share this important aspect with you. Having faith and belief is essential to see you through your journey as you strive to achieve your goals. This is what we need to also slowly instil in our kids as they prepare to venture into the world during the course of the next few years.

As a company, we continue to make good, steady progress. From a one man consulting & training service provider in 2011, we have expanded. The capabilities have been strengthened, become more specialised and also broadened to cover the key areas of need that directly, indirectly relate to risk management optimally. Some of our key milestone moments:

• Launching our own brand of Operational risk events
• Securing a grant from the Singapore govt to enhance learning effectiveness through innovation and disruptive technology...we successfully closed this in 2014 and are now moving forward with the developmental work started
• Changing our business model to be more responsive to client needs
• Bringing in new dimensions of Enterprise risk management and Operating Performance Capabilities (bank transformation) into our service offering
• Establishing a presence/capabilities in the West....the small steps have been taken...we will now start consolidating

As i sign off on this blog, i would like to take the opportunity to wish you and your families a merry Christmas and a great 2015. God Bless.

Simplicity, Efficiency & Value-Add Dominate the Oprisk Agenda

'Seen it, done it but want a more simple, efficient approach with a more visible demonstration of value-add from Oprisk managers'. Heard this before. I keep hearing this again and again through my discussions with Heads of Operational Risk, Control Functions and most importantly senior management. The fetish with models is now being replaced by a more pragmatic and balanced perspective on ensuring risks are being identified correctly, assessed and then managed with optimal resources. A view also being quietly echoed in the higher regulatory circles where a fresh look is being taken at Operational risk practices, methodologies and capital.

Clarity on 'The Three Lines of Defense' for Operational risk is one key area of focus...not just for Banks coming up the maturity curve but for internationally active Banks as well. Is there a way to make this model more effective but also cost efficient is what is often a key driver for discussion & subsequent change. Of course all with the understanding of the regulatory expectation which cannot be ignored.

Tools, data collection and their usage in the end-to-end process is another key area of focus. 'Risk & Control Self Assessments (RCSAs), Key Indicators don't work'.... is a very common and 'real' crib from the Business. And rightly so. The reality however is more basic.....and goes to the core of the Business itself...the process. Lack of confidence in process design and understanding of the same across first and second lines makes senior management nervous resulting in questions like ....'how do we know that these are the right risks?' Not the easiest of conversations to have when you tell the Business that we need to get the processes reviewed first, if we really want to get it right...that then hurts the bottom line.

In the midst of all this, the focus on controls continues unabated with debates on positioning of Internal Control functions where required or deemed necessary.

The back to fundamentals or the basic building blocks focus is now high on the agenda of most Banks. Scandals, frauds, focus on conduct now demand increased integration of values into the way risk is taken and managed. The challenge for Banks and regulators is trying to get this applied across all constituents in the process.....which is exactly what did not happen and therefore led to the reference rate manipulations across the board. Yes, accountability should not just stop with the banks. Every constituent in the end-to-end process must be held accountable.

Change is messy, uncomfortable and necessary. There is however a big difference between politically declaring change to be a success just before the performance assessment period versus declaring change to be a success demonstrably through the results and delivery of desired outcomes.

Addressing simplicity, efficiency with a more value-added contribution from first and second line in the area of Operational risk management will be a welcome result for all. This is how Operational risk managers need to be wired up now to taste and deliver 'success'.

Write to us at 'ask-orp@theopriskpractice.com' if you have some questions or need help.

Operational Risk is a tricky highway, what does the Next 'T-Junction' look like for you?

This phase in our lives will go back in time as a critical phase in the shaping of the new normal for Operational risk. The decisions we take today impact the global industry for many years to come. The question that arises now is what does this mean for the way we look at Operational risk and what needs to change. I want to explore some themes here:

• 'I have everything I need to manage Operational risk' - this is the first comment one hears when meeting a number of clients…the more experienced CROs and OR Heads will of course be more candid and forthcoming as they are keen to get your perspective and insights. Blending the 'Inside-out' with the 'Outside-in' helps provide a more balanced and 'real' basis for firms to understanding meaningfully where they stand in their journey and what needs to be done.

A NEW INNINGS

The establishment of The Operational Risk Practice Pte. Ltd. in June 28^th was really the end of a period of restlessness driven by a strong desire to do something meaningful and diverse in the Operational risk industry. It also marked the beginning of Chapter 2 about which I will continue to write. The restlessness still continues. Oh, yes it does…but this is now on my terms and linked to the aspirations to do a lot within a short space of time in the Risk Advisory & Learning space.

It has been close to 8 mths since we started. We have had our successes on both fronts. As of date we have Advisory clients and have also launched industrywide learning courses and workshops for operational risk across Asia and Middle East.  We also represent the largest Association and Data Consortium for Operational risk in Asia.  We have had our moments of pain and discomfort as well. But at the end of the day there is a quiet sense of excitement, strange feeling of liberation and satisfaction. This, from the varied conversations one is able to have on a diverse set of topics and needs and also being out of the ‘comfort zone’. Every conversation throws up new ideas, thoughts that are noted and revisited every now and then to see how they fit into the broader business plan.

Being hands-on for everything is in its own way gratifying. You are way out of any ‘comfort zone’. Travelling to a new location is without the backing of any major corporate infrastructure. Feels strange, but there is a quiet sense of achievement and determination that comes with it. The entrepreneurial journey has allowed me to reconnect with friends, colleagues and peers who I had lost touch with for quite a while. Some of them are dispersed across the globe. Thank god for skype, email, crackberry’s and the rest of the gizmos. Thanks Steve Jobs for making things easier, linked and fun.  Thank you to my family for their never ending support and encouragement during my moments of reflection and hysteria. Thank you to my friends for sticking by me and throwing up ideas, thoughts and being there.

There is a road ahead. It has my name on it. It gets clearer with every lesson learnt, every success and every failure. There are several T-Junctions. Destiny and effort will show the way.

THE JOURNEY

My professional career started when I joined Standard Chartered in 1990 after graduating with a Masters in Management Studies from Sydenham Institute of Management in Mumbai. My first appointment in Standard Chartered was as line manager responsible for running the data centre for the eight branches in Kolkata (then known as Calcutta, India). Two years later, I was given two days notice to move to Mumbai as Operations Head for the Investment Management Unit in the Merchant Bank. I continued and grew in this role until 1997, when I got the opportunity to move into a newly created role to look at internal controls for specific Business and all the Support Functions for Standard Chartered India. The role reported into the CEO and CFO. This role grew and morphed into a Business and Operations Risk role for India and included responsibility for Insurance, BCP and Y2K.

Around 1999, I started getting restless and began looking out for new areas to venture into within the bank. The question that dogged me was – what is the logical next step for someone with my background. It was then that I became aware of a new function being set up in London called Group Operational Risk. I contacted the Head of the function to understand more. The more we spoke, the more I realized that this was the answer that I was looking for. I consulted with my colleagues in the Finance function and a few friends. Some were very supportive, but there were others who warned that I was taking a big risk….no one in India had heard of Operational Risk. Think twice, I was warned.