Service sector

Recovery and Resilience: Framing Risk Intelligence in the Services Sector

Risks have been completely redefined by the pandemic, risk managers are working overtime to create dynamic strategies and insulate organizations from troubling scenarios. Flexibility and agility have become mandatory standards, in order to operate seamlessly in the COVID-19 stricken global order. To assess the risks besetting the service industry and reassess enterprise risk management (ERM), ICICI Lombard & CNBC-TV18 have held a specially curated “Risk Masterclass 2021”. This is a special initiative under the umbrella of the India Risk Management Awards which recognizes leading Indian organizations that have taken the lead in business risk management.
The session began with an address by Sahil Kangotra, Vice President, Corporate Solutions Group, ICICI Lombard. Sahil looked at the disruptive risks that were widely exposed in the services industry, ranging from cyber risks, global regulations, artificial intelligence, blockchain to currency exchange risks. He quoted, “COVID-19 will represent a shift from frequent risk identification to large risk management.” He added that risk ownership must be mainstreamed, adopting a 360 degree view is imperative to identify early signals and act in time to prevent disasters. Concluding his note on how ICICI Lombard actively helps clients navigate complex risk management and mitigation efforts, he passed the baton to the show’s keynote speaker, Santosh Kumar Nair, Partner, Deloitte India .
Starting off on a lighter note, Santosh exclaimed how this watershed event has reset our settings to default and nothing stays the same. He shared information from a recent survey conducted by Deloitte which covered approximately 200 global companies and 2000 CXOs, 6 out of 10 respondents indicated that the pandemic is not an outlier, meaning that 60% of respondents believe that such events will continue to happen in the future and probably at a much higher frequency. He pointed out, “The hallmark of a good resilient framework is that businesses will be able to reduce response time and will be able to respond to these emerging threats in a much more agile and proactive way, if you don’t grasp the ‘opportunity. your competition certainly will and the flip side of risk is actually opportunity. He then spoke about capital adequacy, extended enterprise resilience, brand risk resilience, and the interconnectedness of risks that have a cascading impact on organizations.

The keynote address was attended by a panel of distinguished industry representatives – Sanjay Datta, Chief – Underwriting, Reinsurance & Claims, Actuarial, ICICI Lombard, Mr. Kamal Kakkar, CFO, Thales India, Mr. Saurabh Lal , CFO, AGS Transact, Manoj Rane, Partner, Head of India, Sonic India, and Bhaskar Anand Rao, Chief Financial Officer, Bangalore International Airport, in conversation with Paromita Chatterjee, Special Correspondent, CNBC-TV18. Sanjay commented that it is business to take risks and they will continue to take risks and face disasters of various kinds. On the other hand, Saurabh emphasized the importance of business continuity planning.

Aviation, despite being the most risk-aware sector, has been the hardest hit, Bhaskar Anand explained how the pandemic has exposed them to unexpected risks. He spoke at length about the drying up of cash reserves which posed a huge threat to this industry. Other issues included strict travel restrictions, fear, uncertainty among leaflets and lack of clarity on vaccinations that crippled the travel and hospitality industry.

Kamal explained how Thales India has adopted strict IT controls, strengthened the security of communications with third parties to exclude the possibility of cyber risks, he also warned “Too much reliability on technology sometimes creates uh a lot of gaps” . Manoj mentioned, “All the main risks are not just on the balance sheet”. From an organizational point of view, he explained the need for greater involvement of C-suite heads and several risk specialists on board to approach risk management strategically. In addition, he warned of non-financial risks, which are not normally taken seriously by businesses and can turn into major problems if left unaddressed.

The panel thoughtfully agreed on the importance of ERM; how it’s time it left its tick-in-the-box status and granted its due relevance in the growing face of an uncertain future. Sanjay stressed the importance of resilience and stressed the need to create a pandemic pool to survive such setbacks and deal with risks more effectively. Before the panel ended, Saurabh alluded to the view of a contingency reserve coupled with digital infrastructure that will see organizations build financial resilience.
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