Navigating risk: Strengthening banking foundations for success

In the dynamic world of banking where uncertainty and opportunity intermingle, the balance between risk and regulation stands as a pillar of success. The recently appointed chief risk officer at BNF Bank, Glen Smith, recognises that “strategically managing risks is imperative, not only to compete but also shape the future of the market”.

Mr Smith, who joined the bank just last August, is an experienced financial services professional with over 30 years’ experience in financial services and banking, specialising in risk and regulation. “Risk management is an ongoing process, and the strategy will evolve with changing circumstances and new risks that may arise. Regular monitoring, assessment, and adaptation are essential for effective risk management,” Mr Smith attests.

“Together with the risk team, I aim to understand the specific risks that BNF is exposed to in terms of credit, operational, market, liquidity and regulatory risk,” he explained. “It is also critical that we continue to manage the portfolio effectively to ensure we have a diversified portfolio, to reduce concentration risk.”

Risk & Strategy

Inherent to the pursuit of financial growth is the element of risk that spans across operational, financial and compliance domains. These risks, if left unchecked, can pose significant threats to a bank’s stability and reputation, and it is within this context that stringent regulations have been established. “Staying informed and agile is crucial,” Mr Smith asserts.

Mr Smith notes that “at BNF Bank we do not consider regulations as barriers and constraints but rather guiding principles upon which trust is built”. Effective risk management is not merely a regulatory requirement; it is a strategic imperative. To foster a culture that encourages proactive risk identification, assessment, and mitigation is crucial,” he asserts. “It’s not about avoiding risks but rather understanding them thoroughly and making informed decisions”.

With information spreading faster than ever, reputational risk looms as a potentially devastating threat. It’s not merely about “what we do” but also how we are perceived. By encouraging a culture of risk awareness and responsible banking, BNF Bank gains a competitive edge in its standing and influence in the market.

Technology: The catalyst of transformation

Emerging innovations offer unprecedented efficiency, convenience, and accessibility; however, harnessing technology demands a thorough understanding of the associated risks. Mr Smith comments that “embracing innovation can lead to enhanced customer experiences and streamlined operations, but failure to understand the intricacies can lead to great risks hindering the organisation’s reputation and positioning. That said, investing in technology provides us with the tools needed to better identify emerging risks, and make data-driven decisions swiftly”. This not only enhances the bank’s risk assessment capabilities but also improves the operational efficiency for the benefit of BNF customers.

Forging ahead with confidence

“As the Chief Risk Officer of BNF, I see the role as critical in ensuring the bank’s stability and growth, and in maintaining and enhancing the bank’s reputation, financial health, and resilience in the face of evolving risks,” stated Mr Smith. “I hope to contribute significantly to BNF’s success and stability by leveraging my experience to assess the bank’s current risk profile comprehensively and implement best practices in risk mitigation.”

Mr Smith adds that he plans to foster a culture of risk awareness and responsibility throughout the organisation, making risk management a shared responsibility amongst all employees. “Furthermore, my team will also focus on the bank’s long-term sustainability by considering environmental, social, and governance (ESG) factors in risk assessment and mitigation.”

Reputation is not just a reflection of financial performance, but a testament to the organisation’s ethical conduct, and risk management practices. By integrating these values into risk management, coupled with astute leadership and a commitment to excellence, BNF Bank secures its place as a trusted partner of financial well-being for clients and stakeholders alike.