The focus on collaboration ensures a more productive and outcome-focused business, which is critical to the innovation of risk.

To innovate we must amalgamate ideas from a diverse set of skill-sets.  The innovation of risk specifically relies on this amalgamation due to the diverse nature of subject matter experts (SMEs) across risk and compliance.

This combination of diversity is required for each of us to “connect the dots”.

Take the example of the Anti-Money Laundering “Know Your Customer (KYC)” process.  For innovative solutions in KYC we must harness the power of operational risk, compliance (AML, Privacy and Legal), fraud and credit risk.

Value of Collaboration

However the difficulty in risk and compliance is in showing tangible financial benefits.

Business Benefit

Evidence consistently shows that collaboration leads to better, more robust and more innovative solutions. In the case of risk and compliance however it may not provide a direct financial benefit.

So what benefit does collaboration in risk and compliance provide?

Bringing together subject matter expertise of risk and compliance supports better business decisions. In essence, it increases the chance that all outcomes are considered. This is however hard to quantify, as you are quantifying what could happen, not what did happen.

Take the recent article on the “over-reaction to COVID-19“. This virus and the global response was, and is, complex. Looking back on things from today’s perspective, it can appear ‘easy to predict’ things differently. However, decisions were made with an unknown future of different risks and different outcomes. Predicting today, what it could have looked like is niave and dangerous.

The benefit of considering the holistic picture of risk and compliance enables us to move forward with ‘eyes wide open’.

5 Reasons Why the Innovation of Risk Requires Collaboration

There are 5 reasons why collaboration is required for the innovation of risk.

  1. Different experiences and backgrounds working together across time zones and locations.
  2. Sharing of ideas in a real-time manner and real-time discussions on these matters.
  3. Enabling us to record, amend, reflect, review and enhance an idea continuously.
  4. Embracing different styles of interaction and behaviours (i.e. introverts v extroverts, Gen X / Gen Y).
  5. Ensuring linking to factual information for decision making.

Each of these sounds simple and yet not everyone can see or accept the importance of collaboration in a risk and compliance context.

From our perspective, there is only one explanation why people don’t understand this, and that is due to the desire for individuals to maintain information as a protectionist mechanism.

Sharing Information is Power

There is an old adage that “information is power”. History continually shows us that this results in worse outcomes.

The most important people in our workforce are those that communicate and share information without thought or consideration to job tenure or career safety.  They accept that through knowledge sharing they are providing the right working environment to deliver the best business outcomes. As we outlined in another article these people want ‘every moment to matter‘.

In Summary

The power of collaboration is critical for the innovation of risk and there is no doubt that it is the most important thing we each of us can do.

Personally, I would not be able to achieve my goals and the goals of the organisation without collaborating in the innovation of risk.

Scott North has extensive executive and board experience in risk management, internal audit, operational risk and compliance, governance, risk strategy, scenario planning, technology risk, technology architecture, systems design, financial accounting, and management accounting. With Chief Risk Officers roles across financial services in Australia, Scott is an accomplished and experienced senior risk executive with extraordinary results in leading risk management teams. An innovative and process-focused leader, with an entrepreneurial style. Scott has a passion for innovation and digital. Scott is an experienced project leader across multiple disciplines including risk, finance and enterprise systems.