Going forward, controls will not be underpinned by binary business rules in quite the same way. For example, historically a firm may have relied on blunt business rules to prevent processing errors. However, there are plenty of legitimate items which would be stopped by these business rules, so relying on them not only means applying an unsophisticated approach to managing the control environment, but also increases costs as firms have to have staff to review all exceptions. By contrast, machine learning establishes what ‘normal’ looks like, so only identifies genuine errors.

New surveillance techniques using technology solutions can now identify complex patterns of behaviour. For example, technology can quickly link data identifying a change in an individual’s trading behaviour to external factors, such as social media activity, to identify potential risks. Technology will help control functions predict dangers like this, so the firm need no longer accept them as an expected risk of doing business. Overall, the environment is much more data-rich than before, thus giving opportunities to see trends and abnormalities much faster.

Clients are spending millions annually on technology and data quality as they begin to see the long-term benefits. While the initial investment can be significant, it means that the firm can break the link, and cost, between changes in business and impact on human capital levels. New Link Consulting believes that the control functions have been underinvested in to date. Banks need to keep up. Even smaller firms will need to invest in more non-financial risk management technology and ensure they have good quality data, though they will be able to deploy less customised, off-the-shelf products because, generally, their operations are less complex.

There is a continuing need for people with risk management skills who understand controls, but clients will increasingly require people with significant technology skills in order to manage emerging risks, even outside of the technology functions themselves. Within this new world of risk management, there’s an excellent opportunity for clients, and in particular control functions, to attract exceptional individuals from both financial services as well as those from outside our industry.

We are an entrepreneurial consultancy, with a flexible, solution-led approach, which brings measurable results on time and within budget. With New Link Consulting as your partner, you will benefit from the collective experience and know-how of some of the financial services industry’s brightest minds, working to find effective solutions to some of the most complex challenges facing your organisation today.

New Link Consulting has five core consulting Service Propositions across our Practice Centres of Excellence. Our knowledge, tools and techniques are shared between and across our practices and client segments to ensure that we achieve consistency in the quality of delivery across all of our service lines. Consultants are aligned across our practices, propositions and client segments, based upon their industry experience and subject matter expertise.