December 2017 | Finance
In the ten years since the launch of the RMA/Wharton Advanced Risk Management Program, the banking industry has weathered the financial crisis, significant and shifting regulatory changes, Brexit, and more. To maintain its objective of helping risk management leaders grow their knowledge and skills over that time, the program has had to keep a step ahead of industry disruptions.
Wharton professor of international banking and program director Dick Herring,says from the beginning, Advanced Risk Management has ”anticipated industryneeds. It was designed in 2007 to help risk managers transition from a specializedarea of expertise to the role of chief credit risk officer. Most banks had not yetmoved to an integrated risk management model, so the goal was very forwardthinking.”
But while content has changed to meet the demands of a turbulent environment, thepurpose and framework of the program have remained constant. “We put together acurriculum that will help people make the change into a more senior role,” saysHerring, who also directs the Wharton Financial Institutions Center. “It’s a changein terms of range of knowledge and the questions you need to ask, and also interms of leadership perspective.”
The program is a blend of academic fundamentals — including statistics and analytictechniques, and economics and finance — and expert practitioner views. Herring saysthe blend is “essential, because no academic knows the details of a very complicatedbank at this point, and generally even very expert bank practitioners don’t have theability to do the fundamentals that a well-trained risk manager needs to know.”Participants agree, citing the mix of academic theory and practical experience asone of the most valuable aspects of Advanced Risk Management. In fact, practitionersessions now include many of those who previously attended the program,including Maria Teresa Tejada, Deputy CRO of KeyCorp.
“I was invited by the RMA Wharton team to serve as an instructor on the topic ofmanaging the risks of M&A as a result of my experience of having led atransformational acquisition.” She adds that Key has sent many otherparticipants to the program: “In my experience as a deputy CRO, managing risk isabout managing people. As to talent, we really need to leverage the subject matterexpertise of our risk professionals and invest in their success by giving them theopportunity to participate in programs like RMA Wharton.”
Because the program is held in two non-consecutive weeks, participants first meeton the Wharton campus for sessions on business acumen and leadership, and thenwork together on projects remotely while they are back at work. When they returnto Philadelphia for the final week, they know one another well. Tejada says Key’sparticipating executives come back to work with “a network of industry colleaguesthat can serve them and our organization well. In today’s changing industry andregulatory environment there is a real opportunity for our risk leaders to think andact differently and that’s catalyzed through their interactions with the globalparticipants on the RMA Wharton program.”
“Years ago,” says Herring, “you could be a risk manager if you were simply good atjudging character and could read a balance sheet. These days you have to know a lotmore. There’s been a huge increase in the number of regulations, and they’re oftenvery prescriptive about how you should monitor, measure, and try to control risks,and we’ve had lots of developments in techniques for trying to anticipate what the future will look like. The demands on risk managers are ever-increasing both interms of regulatory compliance and knowledge level, and Advanced Risk Management helps prepare them and the organizations for the future.”
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