Four decades of experience at the service of colleagues and customers

Paris

Rudi has been doing risk management since the early 1990s. Not the least during the financial crisis of 2007-2008. At one point, he worked four days a week in Paris. "In 2018, my active career in banking came to an end." He came into contact with TriFinance along with a colleague who had started working there. "It immediately clicked with Jean-Philippe, the Leader of the Blue Chip Boutique 'Financial Institutions'. He was looking for seniority for his team and that was exactly what I wanted to offer: helping young colleagues along on their way."

Enhance market and regulatory intelligence

Rudi worked two days a week for TriFinance. Until he was asked for an Executive Director's position in a joint venture of two financial institutions in Asset Management. With his skills and experience, it's not surprising that they thought of him for such an assignment. Now what? You don't let an opportunity like this slip away and TriFinance wanted to keep him on board. Result: he still works for TriFinance 'Financial Institutions' although with a reduced time spending. “I myself wanted to continue coaching young colleagues and to enhance market and regulatory intelligence. Therefore, the fact that I am working fully in the business again is a plus."

Risk and Compliance Expert Practice

How does that coaching work? Rudi emphasizes the regular meetings of the entire Risk and Compliance Expert Practice Group. For him, preparing these meetings, and writing up the minutes afterward are in themselves teaching moments for the Practice members. "During these meetings we discuss what is going on in the market and we look at regulatory changes. We consider them as opportunities for improvement and change rather than a regulatory burden."

Rudi gives some examples: "A letter from the FSMA with guidelines on suitability, immediately makes us think how we can assist financial institutions in complying. The European Central Bank's emphasis on sustainability makes us brainstorm how to assist financial institutions in a companywide project both at the product (investment portfolio - loans - investment products) and at the entity level (bank - insurance company - asset management companies). This approach is very valuable for consultants with a good understanding of certain bank insurance groups. This results in embryonic propositions."

The meetings also explore themes, for instance when someone has finished a project. That’s how they empirically came to the conclusion that the method of internal control in banks and insurers is pretty similar.

Identifying our areas of interest

The meetings are designed to minimize the distance between what TriFinance offers and the challenges discussed with customers. "We call that our 'game plan'. We identify areas around which we want to work because financial institutions ask for it and our project consultants are eager to work on it. We always try to work in pairs: a colleague who is not yet fully operational in his area of interest and an experienced colleague who has already mastered it."

Rudi notes with satisfaction that this way of working has increased the bilateral contacts between colleagues. This fits perfectly into the principles of TriFinance as an international network organization where knowledge sharing is the rule. He mentions that recently a new colleague was recruited who has experience in compliance, just not in the financial sector. "So we help him with the latter. He got two mentors. I myself am also pulling the strings."

Three ingredients for a successful assignment

There are three aspects that you need to get united to bring an assignment to a successful conclusion, Rudi notes. "You need someone who knows the financial institution well, who has strong project management and communication skills, and who has an affinity with the subject matter involved. The key is to unite those three aspects among colleagues."

Impact of the pandemic

The pandemic has caused reflections to re-engineer credit processes, Rudi notes. “Several banks should improve credit risk management practices as the ECB, the supervisory authority, has identified material deficiencies in the credit risk management framework.” The main areas of concern relate to the timely identification and risk classification, collateral valuation, monitoring, measurement, adequacy of provisioning, forward-looking measurement and effective reporting.

In addition, support measures for individuals and companies from e.g. the hospitality and event sector have made it more difficult for banks to assess their creditworthiness.

Four risk factors requiring additional attention

According to Rudi, four risk factors have required additional attention during the pandemic:

• Compliance
• Information security
• Business continuity
• Third-party risk

Financial Institutions had to adapt processes and procedures while maintaining enhanced compliant standards in these fields.

Finger on the pulse

A positive point to mention is that effective third-party risk assessments have become a top priority for Financial Institutions as they are increasingly collaborating with external service providers. Rudi concludes that performance indicators relative to Business Continuity and Information Security are increasingly monitored on an ongoing basis, whereas this used to be done only once a year before the pandemic. Financial institutions have learned to keep their finger on the pulse.