MINT MEDIA MARKETING INITIATIVE

As global business environment evolved in the past few decades,

the risks associated with business have correspondingly increased and have become more complex in nature. The nature of business is changing with dynamic macro-economic conditions and CEOs are now required to manage risks & challenges associated with environmental, geopolitical, societal, compliance factors as well as with technological disruptions. Risk management is becoming a key differentiator for sustainability of business and attaining a leadership position.

With this as the backdrop, Dun & Bradstreet, the world’s leading provider of business information, knowledge and insight, and Reliance Commercial Finance, a part of Reliance Capital Ltd., one of India’s leading and amongst the most

valuable financial services companies in the private sector, organised the 3rd ‘India Risk Forum’ in Mumbai, with BSE Ltd. and Association of Finance Professionals of India (AFPI) as co-partners. The forum had a perfect blend of regulators & luminaries from the finance and risk domain sharing their perspectives.

Delivering the welcome address and emphasizing on the geopolitical risks that will dominate the global economy in the years to come, Mr. Arun Khanna, President, Dun & Bradstreet, Asia said, “Rising geopolitical risks can interrupt supply chains that run across countries and might lead disruptions in availability of goods and services. The cross-border presence of ISIS throughout the Middle East, the subsequent re-introduction of

border controls within Europe’s Schengen zone and the easing of US sanctions on Iran and Cuba are starting to shift the global flow of products and services into new, unknown territory. Dun & Bradstreet had analysed 132 countries against a number of criteria, including level of exports, to assess issues and challenges along the supply chain to produce a global risk score.”

Speaking at the forum, Mr. K. V. Srinivasan, Chief Executive Officer, Reliance Commercial Finance stated, “The Risk Forum is a great platform for CEOs and risk professionals to share thoughts on emerging trends and manage their businesses effectively. Reliance Commercial Finance advocates a strong risk management framework and is proud to be associated with the seminar.”

Giving the IRDA perspective on managing risks in financial services, Mrs. V. R. Iyer, Member (F&I), Insurance Regulatory and Development Authority of India, emphasized that “Risk & opportunities are nothing but two sides of the same coin. To survive & evolve today, companies need to prepare the entire organization to take advantage of the big shifts, ahead of the competition. At the same time, they also have to look at different corners to anticipate the risk & and be ready to respond to the disruptive changes that keep happening.”

Expressing her views on importance

of governance, risk & compliance, Mrs. Usha Thorat, Former Deputy Governor, Reserve Bank of India said, “Banks and financial institutions work on public trust and any loss of confidence in the financial system can create havoc with the economy as is evident from the global financial crisis. What is clear now is that good governance in every sense of the word is the most critical factor in avoiding risk to individual institutions and to the system as a whole. There are also factors on account of too big to fail and interconnectedness that can cause risk to

the system, even though governance, risk management and compliance of individual institutions are good. Thus systemic risk management has now become the focus of regulators.”

Moderating the panel discussion on Changing nature of Risks in today’s Businesses, Mr. Lav Chaturvedi, Chief Risk Officer, Reliance Capital, commented “If there is one thing that is needed in the financial sector, it is the managing of systemic risks and regulatory and risk management frameworks within which it would operate. We are exploring a new normal, with transformational, structural and major regulatory changes all over the world”. The panel deliberated on the various new age risks faced by businesses and ways to mitigate these risks. The risk spectrum has evolved over the past couple of decades, from largely being

credit risk, to other risks like operational risk, liquidity risk, market risk, regulatory risk, compliance risk, technology related risks, risks of disruption due to natural calamities and war, among others, and also the interplay between these risks. They all unanimously agreed that data, predictive analytics, quantitative models, will always help but judgment and business acumen, will enable businesses to draw the line and price risk. Also, with the business models becoming more customer centric and regulators going by the principle of Caveat Venditor, the panelists spoke about the need for honest selling, to avoid the risk of damage to brand reputation.

The second panel discussion on Changing role of risk heads in organizations, was moderated by Mr. Krishnan Ranganathan, Executive Director & Head - Risk & Finance Change, Nomura India. The discussion revolved around the evolving role of risk heads, in organizations operating in today’s VUCA world. It highlighted how organizations should look at risk management as a lead indicator and a strategy for competitive differentiation and market leadership.

The panelists also discussed the importance of principle based regulations, for effective risk data aggregation and risk reporting, like the BCBS 239, set out by the Basel Committee on Banking Supervision, which will focus on Key Senior Management (KSMM), wherein the CRO & his team is expected to monitor the risk situation of the firm, each day. Further, referring to the conflict between growing the business aggressively and exercising caution to manage risks, the panelists conferred that the real issue is not about conflict but about alignment of interest. While the CEO remains the primary champion for the growth of any organization, stakeholders are not looking at just growth rather sustenance of growth. Also, now with digital being the buzz word, growth is not necessarily what you perceive it to be. So, it is critical that the thought process of the CEO and the CRO is aligned to ensure sustainable growth. For this to happen, it is important for a CRO to understand the business as much as a CEO, to learn risk. While this may take a long time but the right thing to do currently is to bridge this gap and create a framework that works for business. Last of all, to build

a successful risk management enterprise, self-awareness at the business level is pertinent.

The forum looked at various ways of managing risks in today’s dynamic environment, a subject very pertinent and important to both businesses and economies in today’s scenario. n

“As businesses become complex and compete globally, risk management is fast becoming a central

theme at strategic levels. In the age where the definition of Enterprise itself is undergoing a change - as new forms of business models emerge and are rapidly transforming the way business is being done - identifying, managing and pricing the risk is the key differentiator, to survive, compete and sustain.”

— MR. LAV CHATURVEDI Chief Risk Officer, Reliance Capital

RISK MANAGEMENT: A KEY DIFFERENTIATOR FOR ATTAINING LEADERSHIP POSITION

From Left to Right: Mr. K. V. Srinivasan, Chief Executive Officer, Reliance Commercial Finance, Mrs. Usha Thorat, Former Deputy Governor, Reserve Bank of India, Mr. Arun Khanna, President, Dun & Bradstreet, Asia, Mrs. V. R. Iyer, Member (F&I), Insurance Regulatory and Development Authority of India, Mr. Ananta Barua, Executive Director, Securities and Exchange Board of India.

“Risk management has become a very technical subject post liberalization. Dun & Bradstreet’s India Risk Forum has contributed immensely to the cross-industry & cross-regulator risk management framework. I hope Dun & Bradstreet will continue to arrange the India Risk Forum every year for debating & collating the latest information & wisdom in this important field.”

MR. ASHISHKUMAR CHAUHANMD & CEO, BSE Ltd.

“Effective risk management is not a choice but a necessity today. As companies adopt to new age technologies and unearth new opportunities of growth amid rising competition, they need to address the associated risks. It is imperative that companies take proactive measures to manage their business risks.”

MR. ALOK AGARWALExecutive Director,

ICICI Lombard General Insurance Company Ltd.

“Creating and embracing a risk culture (within the overall organization culture) is no longer an option. It is an imperative. Such a risk culture should also suitably align risks and rewards in a way that is sensitive to the societies in which we operate. As an example, as part of our new values and beliefs, we have a commitment to do what is right and not just what is allowed.”

MR. ANAND RENGARAJAN Managing Director, Head - Investor Services, India, Deutsche Bank A.G.

“The time between identification of risks and their manifestation is becoming shorter & understanding embedded risks in portfolios and businesses is critical for early problem recognition.”

MR. PAVAN KAUSHALChief Risk Officer, IDFC Bank Ltd.

“Using digitisation of processes combined with data is an opportunity for mitigating risks.”

MR. DEEPAK KINGERExecutive VP (Chief Compliance Officer),

ICICI Prudential Life Insurance Company Ltd.

“Today the CRO has overcome his identity crisis. Gone are the days when his views were ignored if they went against the grain of the CEO/Board views. I see Risk Management as the career path to the C-suite in the next decade.”

MR. KRISHNAN RANGANATHANExecutive Director & Head – Risk & Finance Change, Nomura India

“Chief Risk Officers are at an enviable position of having a vantage point to evaluate an organization’s risk, compliance and controls environment that enables them to provide the required assurance to the Board of Directors around the effectiveness of risk management practices in place.”

MR. PERVEZ WORKINGBOXWALLACorporate SVP – Risk Management, WNS Global Services (P) Ltd.

“As a growing economy, the pace of regulatory change, faster master dynamics, higher integration between capital markets globally and greater transparency sought by investors will make redundant businesses that are either slow to adapt or that adapt with weaker risk monitoring and predicting systems. The launch of India Risk forum/conclave 2015 is aptly addressing the need for Proactive Risk Management.”

MS. RAMA VASANTHARAJANSenior Vice President & Head - Risk,

Audit & Compliance, Birla Sun Life Asset Management Company Ltd.

“The conclave was a good platform to build on these thoughts and the changing role of the Risk Head in organizations. It also addressed what new competences a Risk Head should hone to become a true business partner in the organization”

MR. SAMEER KAMATHGroup CFO, Motilal Oswal Financial Services Ltd.

“The Chartered Institute of Procure-ment & Supply (CIPS) working with Dun & Bradstreet, publishes

a Risk Index. It shows that global supply chain risk is very high at 79.1 in Q3 2015, as intercon-nected geopolitical developments threaten to redraw the supply chain map. In comparison the pre-finan-cial crisis level for the index was 40.4 in Q4 2003.”

— MR ARUN KHANNA President, Dun & Bradstreet, Asia

SPEAKER BYTES

“Every commercial activity involves managing risks arising out of the environment - internal & external.

With shortening business cycles and quicker changes in business environment, risk management has assumed greater importance. Risk management is not just a defensive function but can be an effective competitive tool in the market place.” MR. K. V. SRINIVASAN

Chief Executive Officer, Reliance Commercial Finance

“Sound Governance, risk management and compliance for all businesses in today’s world are required to create

a stable market place capable of generating sustained and equitable growth. Governance operates at managerial level risk management at operational level while compli-ance function is like an overarching watchdog.” MRS. USHA THORAT

Former Deputy Governor, Reserve Bank of India

“ C o m p a n i e s that lead in risk management tend to take a holistic view of risk and involve risk

management in the business at a strategic level. This leads to increased profit margin due to better decision making.”

MRS. V. R. IYER, Member (F&I), Insurance Regulatory and

Development Authority of India

Host: Title Partner: Co-Partners:

Reliance Commercial Finance is presented by Reliance Capital Ltd