Michael Glotz joins the SRA Risk Intel Podcast, with host Ed Vincent, discussing the significance of enterprise risk management (ERM) in the banking industry.
Michael Glotz, the CEO and Co-founder of SRA, shares his expertise based on his 30-plus years of experience in risk management, enterprise risk, and audit. Glotz states that the value of risk management lies in making the organization better. It is a fundamental aspect of good management to understand the most critical issues within the bank, so that the management team can effectively address them holistically. Furthermore, risk management plays a crucial role in ensuring compliance with regulations and preventing legal issues - safeguarding the bank's reputation and stability.
The primary objective of risk management is to explore the question, "What could go wrong?" Once potential risks are identified, efforts can be made to prevent them from occurring or to mitigate their impact. Glotz provides an example of cybersecurity, highlighting the importance of having the right team and software in place to significantly reduce the risk associated with cyber threats.
Ed Vincent agrees with Glotz's insights and underscores the significance of proactive risk management. He emphasizes the importance of anticipating and addressing issues before they arise, rather than merely reacting to them. Vincent also concurs that forward-looking risk management activities hold the greatest value. While past experiences can offer valuable insights for identifying focus areas, understanding the bank's current strategic plans and aligning them with risk mitigation measures is of paramount importance.
Overall, the conversation highlights that enterprise risk management is crucial for banks to enhance their operations, effectively address potential risks, and align their strategies with proactive risk mitigation measures.
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