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Home Compliance and Risk

The New Risk Management Org Chart

February 23, 2018
Reading Time: 2 mins read

By Yvette Hollingsworth Clark

As a result of the fintech and regtech evolution—or, dare I say, revolution—of using emerging technology to improve compliance and risk management activities, as well as overall business operations, many question whether technology will replace certain risk management jobs. The answer is a mix of both yes and no.

As old jobs go away, new jobs are created. One could argue that jobs are not replaced but enhanced in response to emerging technology being used as an aid to human intelligence. Every tech solution—from mousetraps to machine learning—has a human in it somewhere who had the idea to explore how technology can:

  • Make humans more efficient
  • Increase productivity
  • Improve accuracy
  • Stimulate creativity

With this in mind, emerging technology should not be viewed as the threat of job elimination, but rather as a tool that can help one maintain a competitive advantage in their role.

As we get smarter and do things differently through the use of emerging technologies, compliance and risk management will need to keep pace by staying smarter too. As such, the traditional role of a compliance officer or risk manager may evolve to a role such as digital ethics officer, or DEO. I envision a DEO being responsible for creating and maintaining a “responsible digital network policy” that would govern how digital solutions are developed and used and ensuring that enabling inputs such as technology codes, algorithms and data queries are designed and operationalized in an ethical manner. The DEO would need to understand what bad coding looks like and have a full understanding of how technology designed to do good can be manipulated to do bad things, as well as be positioned to detect and monitor for anomalies on a continuous basis.

Another example of a new role for compliance and risk officers is as a data governor. Chief data officer is not a new role, but a CDO generally tends to focus on maintaining data architecture, ensuring data integrity as it pertains to source systems and helping build queries for analyses. Within this context, a data governor would focus on the use case of the data to ensure the data is being used responsibly and for a business purpose that avoids creating undue exposure or potential harm to a customer, such as predicting behavior based on inputs that are irrelevant to assessing one’s ability to repay a loan (for example, the content or frequency of ones’ social media posts or fantasy football results).

I see new and exciting opportunities on the horizon for compliance and risk management professionals. As greater connectivity among technology architects, data architects, coders, risk management officers, lawyers, and research and development teams begin to jell, the need for risk algorithm specialists, risk data scientists and regulatory coding experts is already upon us.

Yvette Hollingsworth Clark is EVP and regulatory innovation officer at Wells Fargo. She was named to American Banker’s “Most Powerful Women in Banking: Women to Watch” list in 2017.

Tags: Big dataEthicsFintechRisk management
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