Having very successfully managed risk on a $100 billion+ portfolio, people often ask me about various forms of risk.
From my perspective, the classic perspectives of risk management provide a great amount of detail, but fail to consider an overarching perspective, trust.
Regulators exist because the government cannot trust institutions. Auditors exists because investors and boards cannot trust management. Validation and oversight exist because no one can trust anything.
Without trust, words and numbers do not mean much. Listen to CEOs of failed companies months before their failure and typically you will find a reassuring CEO.
Running a company requires a lot of trust; the only way you know anything is through trust that information gathered and shared is accurate.
The best way to ensure trust is through transparency. Broad scale accessibility to information ensures many eyes, all brining their years of experience to bear, can check the soundness of what has been furnished.
Organizations need a unifying thread that connects information across people, areas, and departments to ensure transparency.
This means trust, a foundational aspect of risk management, is heavily contingent on risk operations. Some financial institutions have risk operations, but they are chasing a forever moving target and they barely tread water; most have not even considered it.
At the heart of SOPHIACI is sound analytics operations with transparency at the core. SOPHIACI (SOPHIA Centralized Intelligence), creates centralized model operations, data cleansing, and reporting which enables decentralized analytics along with information accessibility.
With this capability, silos are smashed and information travels everywhere it needs to go. Individuals, areas, departments, and companies are unified. Information is verified. Trust is easy. This is the way business is supposed to work.