In just the past few years, a series of unprecedented and fast-moving threats have disrupted organizations. How companies, particularly financial institutions, respond to these complex risks has profound implications. The COVID-19 pandemic wreaked havoc on credit models, and social media has played a leading role in accelerating bank runs to real time. The latter exposed a systemic risk that has required banks to rethink their liquidity and interest rate models. No one feels these changes more than the chief risk officers (CROs) at financial institutions. Traditionally, these CROs focus on dealing with financial risk and limiting credit and market losses'both critical for keeping institutions safe for customers and the economy at large. But over time, a new era emerged in which CROs faced greater nonfinancial risk amid pressure to boost the bottom line. Today's evolving risk environment once again puts new pressures and requirements on CROs. To be successful these days, CROs need to exert more influence and manage more risk. They need to do so amid mounting scrutiny from supervisors while building the business. Most important, they need to embed future-ready resilience in their institutions. As Richard Treagus, CRO of Old Mutual Limited told us, resilience has become the North Star guiding the CRO office and leadership suite: 'We [as CROs] really need to demonstrate that organizational resilience is respected, healthy, and a high priority.'...
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