Recovery and Resilience: Framing risk intelligence in service sector

Risks have been completely redefined by the pandemic–Risk Managers have been working overtime to create dynamic strategies and insulate organisations from unsettling scenarios. Flexibility and agility have become obligatory norms in order to seamlessly operate in the COVID-19 struck world order.

To gauge the risks that assailed the service sector and re-evaluation of enterprise risk management (ERM), ICICI Lombard & CNBC-TV18 organised a specially curated “Risk Masterclass 2021”. It is a special initiative under the aegis of India Risk Management Awards that recognises India’s leading organisations that have taken the lead in managing business risks.
The session commenced with an address by Sahil Kangotra, Vice-President, Corporate Solutions Group, ICICI Lombard.  Sahil delved into the disruptive risks which were prominently exposed in the service sector, ranging from cyber risks, global regulations, artificial intelligence, blockchain to exchange rate risks. He said, “COVID-19 will represent a shift from frequent risk identification to great risk management.”  He added that risk ownership needs to be across the board, adoption of a 360-degree view is imperative to identify early signals and act in time to prevent catastrophes.  Ending his note on how ICICI Lombard is actively helping clients navigate complex risk management and mitigation efforts, he passed the baton to the keynote speaker for the show, Santosh Kumar Nair, Partner, Deloitte India.
Starting on a lighter note, Santosh remarked how this watershed event has reset our default settings and nothing remains like it was.  He shared insights from a recent survey conducted by Deloitte which covered around 200 global enterprises and 2000 CXOs, 6 out of every 10 respondents indicated that the pandemic is not an outlier, which means that 60 percent of the respondents believe that such occurrences will continue to happen in the future and probably at a much higher frequency. He said, “The hallmark of a good, resilient framework is that enterprises will be able to cut down on response time and will be able to respond to such emerging threats in a much more agile and proactive manner, if you don’t seize the opportunity, your competition definitely will and the flip side of risk is actually opportunity.”  He went on to speak about capital adequacy, extended enterprise resilience, brand risk resilience, and the interconnectedness of risks that have a cascading impact on organizations.
The keynote was followed by a panel of distinguished industry representatives–Sanjay Datta, Chief,  Underwriting, Reinsurance & Claims, Actuarial, ICICI Lombard; Kamal Kakkar, CFO, Thales India; Saurabh Lal, AGS Transact; Manoj Rane, Partner and Head of India, Sonic India; and Bhaskar Anand Rao, Bengaluru International Airport–in conversation with Paromita Chatterjee, Special Correspondent, CNBC-TV18.  Datta commented on how it is the business of business to take risks and they will continue to take risks and face catastrophes of various natures. On the other hand, Lal stressed on the importance of business continuity planning.
Aviation, despite being the most risk-conscious sector, was most severely impacted, Rao said, explaining how the pandemic exposed them to unexpected areas of risks.  He spoke at length about drying up of cash reserves that posed a huge threat to this industry.  Other problems included strict travel restrictions, fear, uncertainty amongst flyers, and a lack of clarity on vaccinations that brought the travel and hospitality industry to a grinding halt.
Kakkar explained how Thales India has adopted strict IT controls, strengthened security for third-party communication so as to rule out the possibility of cyber risks. He said “too much dependability on the technology sometimes uh creates a lot of gaps”.
From an organisational standpoint, Rane explained the need for greater involvement of C-suite heads and multiple risk specialists on board to tackle risk management in a strategic manner.  Also, he cautioned about non-financial risks, which are normally not taken seriously by companies and have the potential to turn into major issues, if left unattended.
The panel judiciously agreed on the importance of ERM; how it is about time it moved from its tick-in-the-box status and be accorded its due relevance in the growing face of an uncertain future.  Datta stressed on the importance of resilience and emphasised the need for creating a pandemic pool to survive such setbacks and tackle risks more efficiently.  Before the panel drew to a close, Lal alluded to the view of a contingency reserve coupled with digital infrastructure that can see organisations build financial resiliency.
Courtesy- https://www.cnbctv18.com/business/recovery-and-resilience-framing-risk-intelligence-in-service-sector-12285152.htm