Category Risk Management

Set yourself up

11 October 2018 Jonathan Faurie
Jacques Cilliers – CEO of First National Bank (FNB)

Jacques Cilliers – CEO of First National Bank (FNB)

Big thinking is needed to navigate the turbulent times that we live in. This challenge is not unique to South Africa, it is echoed in every market around the world as the winds of change are blowing.

This was the statement that set the tone for the recently held 2018 Institute of Risk Management South Africa (IRMSA) Conference. 

No easy task

A similar gauntlet has been thrown down at the feet of every company in South Africa, particularly those dealing with risk management. 

The key note address on the first day of the conference was delivered by Jacques Cilliers – CEO of First National Bank (FNB) – who said that over the years, he has come to appreciate that the challenges that face FNB when it comes to risk management are no different to the challenges that face any company that wants to endure in South Africa. 

“One of the biggest things that companies need to realise from an early stage is they are setting themselves up for the future, and part of that future is that they need to recognise that not every person is going to love them. As a product provider in the financial services industry, companies need to try and get people to trust them. There is a big difference between fighting for love and fighting for trust,” said Cilliers. 

This is no easy task and can be challenging for some companies, especially those who are just starting out. 

Cilliers added that it is equally important to realise that it is impossible for companies to never make mistakes. It is during these times that companies build their reputation. 

“Companies need to acknowledge that they have made the mistake, they need to put plans in place to make sure that the mistake does not occur again, and they need to correct the mistake that they have made,” said Cilliers. 

How to hunt an elephant

Cilliers points out that there are tell tale signs that companies need to take note of before a challenge becomes the elephant in the room. 

“The first thing that occurs is that we need to talk about the challenge before it becomes an elephant. Management then needs to remain calm and acknowledge the fact that it is everybody’s job to resolve the challenge or get the elephant out of the room,” said Cilliers. 

He added that if a challenge has reached the elephant stage, all is not lost. Elephants grow, so if a company catches the elephant before it grows, companies won’t be scoring as many own goals. 

The devil is in the detail

Cilliers points out that when it comes to risk management, there is a lot of complexity involved when it comes to carrying out a certain project or rolling out a new product/service offering. 

“The devil is in the detail and companies are often blind to the challenges that need to be overcome when rolling out a new product or service offering. Nobody ever starts launching a new product or service thinking that something will be a problem. The secret to this is to manage complexity with the appreciation that things can – and probably will – go wrong along the way. When this happens, what is your Plan B? Get the situation under control and push ahead. Do not linger on the earlier failure, learn from it,” said Cilliers. 

While it is the big issues that present companies with most of the challenges that they will face during the launch of a new product or service, there are often a lot of complexities associated with small issues as well. 

What does the future hold?

What does the future hold for companies when it comes to risk management? 

Cilliers pointed out that no company can survive without addressing innovation. He added that because certain people will remain irresponsible (or uneducated) when it comes to managing their finances, the financial services industry will still be around in 180 years’ time. 

“The financial services industry just won’t be the same as we know it today. There are a lot of tools available to us, but we need to innovate our businesses with the tools of the time. Over time, tools change. There is also a lot of talk in the industry about technological tools being ethical or unethical, a tool is neither; the application of the tool is where the question of ethics comes in,” said Cilliers. 

Finally, Cilliers pointed out that companies need to move towards adopting a risk-based architecture as opposed to a rules-based architecture. In that way, companies will be able to adapt to the challenges that they are presented with. 

Editor’s Thoughts:
Companies face challenges every day and have set rules about how to address these challenges. However, these rules need to be adaptable because the nature of the challenges evolves all the time. Are companies prepared for this? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts


Added by Gillie Gillie, 13 Oct 2018
Message to Jacques Cilliers

Full marks for your excellent insight.

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