In this interview with Kay Lindley, Head of Group Operational Risk at Bendigo and Adelaide Bank, she talks about how financial institutions as a whole need to remove the ‘tick in the box’ culture to adopt a truly effective operational risk management framework

1. Head of Group Operational Risk: ‘Tick in the box’ culture
dilutes value and focus of building opportunities
Q&A with Kay Lindley, Head of Group Operational Risk for
Bendigo and Adelaide Bank
Financial Service Operational Risk and Compliance Forum 2011
Finance IQ
Now can you explain for us how the GFC has actually impacted the finance
industry?
Kay Lindley
Well, I think the biggest thing is there has been reputational damage and a loss
of confidence in the financial industry. Obviously, there has been a large number
of impacts such as repricing of risk, slowed credit growth, and the loss of
mortgage business, and even loss of banks in community areas. Within the bank
sustaining your staff numbers, loss of the staff bonuses, cost of funding, greater
regulation, issues with securitisation. A lot of our people right now are really
hoping that this will all lead to more robust risk management practices.
Finance IQ
Now is installing a ‘compliance culture’ important in maintaining and managing
operational risk then?
Kay Lindley
Good question. But I think the GFC is probably showing us a bit what happened
if we left the compliance culture, but I guess banks by nature take risk so
certainly, our industry is in the nature of taking risks. And without a good
understanding of risk management practice and how that helps in decision
making and strategic planning, I think the risks increase. I think it also creates an
accountability culture for people to take responsibility for their decisions. Also a
compliance culture sits with the whole education and awareness of good risk
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2. management practice and allowing banks to achieve their objectives and values.
So I guess all in all it drives the right behaviours.
Finance IQ
Now what kind of strategies can a company adopt to design an effective yet
flexible operational risk management framework?
Kay Lindley
Well, I think they need to try and remove ‘the tick in the box’ culture because that
tends to dilute the value and the focus on emerging risks and building
opportunities. So, we need to continually assist the new risks and keep up with
the changing landscape and prepare the organisation for what is coming and be
more proactive rather than reactionary. And so I guess to get the cultural change
really imbedded I think its making sure the business relationships are really
robust. I’m trying to remove the word risk – it can often have a bit of a pebble of
stoic response - one falls asleep when you talk about risk. Perhaps talking about
things that stop people achieving their objectives rather than just talking risks at
the business is the answer.
Finance IQ
What kind of role does technology play in revolutionising Operational Risk and
Compliance structures?
Kay Lindley
Well I guess the key one is that there’s more real time information on risks so
you’d be able to see the indicators when they’re reaching warning lights, and
basically allowing you to see when you’re maybe reaching your risk epitaph. I
think you also have an ability to reach more of the masses and for example in
business continuity, if you’re in a crisis you’ve got the ability to communicate
largely. And I think that technology supports that whole compliance culture and
then allows you to deliver a bit of a self-service reporting process as well.
Kay Lindley, Head of Group Operational Risk at Bendigo and Adelaide
Bank will be presenting at the Financial Services Risk and Compliance
Forum 2011. For more information about this event, please visit
www.riskandcompliance.com.au or email us at enquire@iqpc.com.au.
Don’t forget you can also add us on Twitter @iqpc_australia.
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3. Finance IQ
Can you please tell us a bit about your role and your experience?
Kay Lindley
I’m currently Head of Group Operational Risk for Bendigo and Adelaide Bank
looking after financial crimes, and anti-money laundering compliance, business
continuity, and operational risk, and a team that create all the solutions for the
risk framework fit for the bank, and then a little team of people who really the
customer-facing business partners to the business. My background is largely in
IT and at lesser part of it is in risk.
industry.
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