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Paige McNamee

Why did SVB collapse?

Paige McNamee - Finextra Research
Discussion
Lloyds Bank cuts risk dept headcount
Ketharaman Swaminathan

Ketharaman Swaminathan

  Kudos to Lloyds Bank. I don't recall any other bank anywhere in the world taking such a public and explicit stance on what has always been well known in business: Mitigating risk does not pay the bills. Screening for risk is okay in loan approval, credit card authorization, and other transactional areas but too much risk sensitivity blocks strategic transformation. Most often, risk professionals lack the competence to analyze risk in the TO-BE transformed state in a rigorous manner, so they lean towards blocking the transformation as CYA strategy. Too much risk sensitivity is one big reason why banks have lagged fintechs in product and UX. I'm not saying banks should mimic fintechs' products and UX but, if that's what they want to do, downsizing risk department headcount is the way to go.
Lloyds Bank cuts risk dept headcount
Robert Burch

Robert Burch

  Completely agree Peter.  This is either a very odd decision or a badly worded announcement.  Knowing the risk of doing anything is vital.  That knowledge should then be used to calculate the reward necessary to justify the risk.  If the reward looks unachievable, then the risk should not be taken.
Lloyds Bank cuts risk dept headcount
Peter Bayley

Peter Bayley

  There are many reasons to cut jobs in Risk - automation, improved detection capabilities, restructure between functions, globalisation etc. etc.  could all be legitimate. But positioning a reduction in staff because Risk is seen as a 'blocker' to strategic change, sounds like a mangement issue, not a departmental structure one. If process is poor, then you invest in the systems and capabililities; not remove the folks who have been forced to work to poor process and position them as 'blocking' profitability. Risk should always be a challenge function.  They should be pointing out the risks from change, as well as those from the status quo.  Risk is the function that asks the emperor what he/she has done with his/her clothes, when everyone else is congratulating them on their elegance and style. Either there is much more to this story than is being reported here, or Lloyds is taking a somewhat odd  position.  I have no idea what Lloyds' new strategy is - but perhaps they should be checking whether things havent turned a little chilly around the rear end....
EBA Clearing preps Verification of Payee
A Finextra Member

A Finextra member

  Hi All, Can an indirect participant of SEPA make avail of this service
Scott Hamilton

Which banks are at risk after the SVB collapse?

Scott Hamilton - Contributing Editor, Finextra