Hong Kong’s financial institutions need skilled workers to improve risk management

While large financial institutions have made progress applying smart technologies like cloud, biometrics, and big data analytics to their risk management functions, 66 per cent of executives say skills deficiencies are impeding the effectiveness of the function as these technologies evolve, according to a recent study by Accenture.

You can throw technology at problems but if you don’t have skilled workforces to utilise the tech, you have a problem.

The study, which is based on a survey of 475 risk management executives in the banking, insurance and capital markets sectors globally, also found that 73 per cent of executives cite an increase in the “velocity, variety and volume” of data as impeding the effectiveness of their risk management functions. We may have more data points at our fingertips, but if we cannot aggregate them meaningfully it’s a missed opportunity and a potential liability.

This underscores that as the nature of risk becomes more diverse and the amount and quality of data explodes, the need for the skills to bridge core risk management and new technologies is more urgent than ever.

Since the 2008 financial crisis, the world has changed dramatically. Previously, financial institutions responded to regulatory and control issues by adding talent. Now they must pivot to increase the skills of their talent to keep pace with new realities of data and technology. While technology cannot replace experience and good risk management discipline, the risk teams that will be most effective at integrating technologies like big data to recognise patterns and test hypotheses will be the ones that are best positioned to outperform their peers.