Transcript | Risk Transformation: Carol Beaumier

This is Risky Women Radio – a show to connect, celebrate and champion women in risk, regulation, and compliance. Sharing insight and perspectives from the most influential members of our global Risky women network on the latest developments, we need to think about, the challenges we should all talk more about and the innovation we are most excited about governance, risk, and compliance. Bringing together the hundreds of senior women professionals already connected with a new emerging group of leading women and men. I’m Kimberley Cole, your chief risky woman.

Welcome back to our transformation series on Risky Women Radio, where we will be talking about innovation and transformation and taking a look ahead at the views from some amazing risky women. on what’s next in the world of risk management. I’m Lucy Pearman Global Head of risk controls transformation at Protiviti. And I have the pleasure to introduce today’s risky woman, Carol Beaumier. Carol is a senior managing director in Protiviti’s Risk and Compliance practice and oversees the firm’s AsiaPac financial services practice. Prior to joining passivity, Carol was a partner with Arthur Andersen, where she led the global regulatory practice was a founding member of the Secura Group and leader of the firm’s risk management practice. Carol’s also been a regulator with the Office of the Comptroller of the Currency, a Bureau of the US Treasury Department. An experienced consultant with more than 30 years of experience, Carol has extensive experience with numerous regulatory issues that affect multiple industries. She is a frequent author and speaker on regulatory and other risk issues. For the last several years, Carol has been a regular presenter at the Institute of international bankers, BSA / AML / OFAC training series. She is also a lecturer at the Boston University School of Law for which she has designed and is teaching an anti money laundering course in the university’s certificate in financial services compliance program. Welcome, Carol.

Thank you, Lucy. It’s a pleasure to be with you today.

So Carol, tell us your story,

I can honestly say that my career in financial services and regulatory consulting is by happenstance, it was not the original plan. My original plan was to be a writer. But through a series of events and circumstances that began when I decided it would be good to take a year or two off between undergraduate and graduate school, I first ended up working for a bank, then I became a regulator for many years, as you suggested, and now for a very long time a consultant. So somewhere along the way, and I believe it was kind of midway through my regulatory career, I concluded that financial services was going to win out over my writing career.

Excellent. And what excites you most about the industry that you work in Carol?

Throughout my career, I’ve worked in a lot of different areas of risk. And I think for me, regulatory compliance has really been of great interest. I think the reason that I’ve enjoyed it so much is because it is ever changing. There is always some new regulatory requirement or some new area of regulatory emphasis that the industry has to deal with. And furthermore, approaching it from a consulting standpoint, means that I also need to think about kind of the unique circumstances of different clients. And that adds another dimension of challenge to it. I’m also really interested in what I would call the business of compliance. When I think back to the start of my career in the US, I would say that compliance departments were largely focused on the literal adherence to the Federal Reserve alphabet regs. And now when I look at compliance departments, they’re asked to do so much more, and are really going way beyond adherence to laws and regs and getting very involved in the management of a wide range of different risks. And I find that evolution really fascinating.

And what’s the biggest risk that you’ve taken in your career so far Carol?

That’s an interesting question. I expect that other people who looked at the career decisions I made probably thought I was taking risks. I can still remember my first day of orientation as a regulator, when the instructor looked around the room and said, look at all of you sitting here in this room, some of you won’t be here at the end of the training program, and I knew that on paper, I was the least qualified person in the room. But again, I didn’t think of it as a risk, I thought of it as an opportunity. And I have to say, for me personally, if someone suggests I can’t do something, I tend to find that pretty motivating.

And what advice would you give to someone pursuing a similar career path to the one that you’ve taken?

I would say venture out of your comfort zone, at every opportunity, you have to do it, I can think of no better way to learn and no better way to build self confidence.

And who inspires you?

I was really fortunate in the early stages of my career to have some great sponsors, people who really pushed me people who put me in circumstances that really tested me. And I think just knowing that they believe that I could be successful in those situations, is something that I found very inspiring, and I think it has stuck with me throughout my career.

This episode is brought to you by Protiviti. Protiviti is a global consulting firm with deep expertise in transformation, risk management and compliance. Partner with Protiviti and face the future with confidence.

Now I want to ask your expert opinion Carol on emerging risks in financial services. What are the emerging risks that you think should be on top of mind for financial institutions today?

So as I mentioned before, so much more is expected of compliance departments today, we’ve moved beyond that literal adherence to laws and regs to expecting compliance to play a significant role in managing risks. So two of the risks that come to mind in the current environment are cyber and ESG. I’m not sure that we can call these emerging risks because they’re already here. But I think we can expect that compliance departments will be expected to play a larger role going forward, and how these risks are managed. I also think from a risk perspective, it’s important to be mindful that the regulators’ approach to supervision continues to change. And just as the industry has tried to exploit both technology and data, so to have the regulators, and I think that will have an ongoing effect on how supervision is carried out in the future.

What are the biggest challenges that you think both of those risks pose? And what opportunities do you foresee for financial institutions to address them?

So I think not unlike other areas of financial services, the biggest challenges involve attracting and retaining the talent that’s needed to manage today’s myriad compliance risks. And again, as the regulators become better and better at harnessing data, I think financial institutions are really going to have to be much more attentive to what the data is telling the regulators, particularly given the fact that the regulators are able to look across the entire industry and to compare one institution to another. And all of that said, though, I still think that there is so much more that can be done with technology. I mean, certainly a number of financial institutions have done a lot already. But for the industry at large, I think just from simple technology, like RPA, to further exploiting artificial intelligence, and machine learning still has so much more potential.

I agree with that. And how do you think those technologies have already started to help to accelerate solving those risks?

So if I look at financial crimes as an example, because that’s an area where I spend a lot of my time and we’ve been using technology for decades, I mean, from transaction monitoring as an example, but now we can point to uses of RPA, we can look at process mining, we can look at data visualisation, the use of advanced analytics, AI, machine learning, natural language processing, all being used across financial crimes, to improve both effectiveness and efficiency. And I think we can draw the same parallels to many other areas of compliance too.

You mentioned that one of the biggest challenges being bringing in and the retention of talent. How do you think leaders best navigate the change that’s needed to manage these emerging risks?

So I would say there are two maybe three major considerations from my standpoint, the first and foremost is embracing the need for change, recognising that it really is important. The second goes back to the comment about talent, making sure that the organisation has the talent and experience it needs to affect the change. And then the third, and maybe this is limited to just some markets, but I would say in the markets where the regulators have not been as proactive or supportive in fostering innovation, I think it’s really critical to take the regulators on the journey to because ultimately having their buy in will be very critical to the success of the undertaking.

Yeah. And what are the some of the most disruptive or thought provoking ideas that you’re seeing in compliance at the moment?

I still think there’s a lot of upside on exploiting data, which has always been a challenge for the industry because of the disparate systems that most financial institutions, certainly large ones, have had to deal with. I’m also still very much intrigued by industry efforts to share information, though I always wonder about how successful these efforts will be kind of given the disparate national and international regulatory requirements that we have. But would be significant moves forward, if we could figure out a way to make them work.

Yeah. And why do you think transforming compliance is important? And what’s the consequence for an organisation if they don’t transform their compliance?

Sure. So I think the obvious answer is cost, right? For a very long time now, we’ve watched the cost of compliance kind of spiral out of control. But over time, I think not transforming will also become an issue of effectiveness, because the institutions that have been more innovative will do a better job of preventing and detecting compliance risks. And I think there will be an impact on people too, because I think the best talent is more likely to want to go to those organisations that have been more innovative.

Connecting, celebrating and championing women in risk regulation and compliance, Risky Women Radio takes an intimate look at the rants and revelations of the top women shaping the debate and the industry.

Thank you, Carol. So we’re moving into our next section where we hear about your rants and your revelations, and we’ll start on the positive form of that with your revelation. What was your lightbulb moment and something that shaped the choices that you’ve made in your career?

Well, I’d say certainly, for me, it was when I made the decision to move to Washington for the Office of the Comptroller of the Currency. That to me was the point of no return. That’s when I knew I was going to pursue a career in financial services and not writing.

And what’s your rant? What’s the one thing that you really want to change?

If I could change one thing in the regulatory compliance world it would be to stop financial institutions from building processes on top of processes when they’re forced to deal with a regulatory problem or implement a new requirement. I’ve seen it happen so many times. And inevitably, it just leads to that inefficiency that we’ve been discussing.

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And moving into our rapid fire round Carol. In one word, what do you see as the top priority for the year ahead?

I’m going to say normality, though I’m not sure what that means anymore.

What’s the new normal? What’s the biggest risk for our industry?

Failure to innovate.

The best quality for successful leaders in risk and or transformation roles?

Open mindedness.

And if you could teach one subject in school, what would it be?

So as you’ve already said, I teach financial crimes, but someday, maybe I’ll get to teach that writing course.

And who do you most admire?

I admire people who live by their values, no matter what the consequences.

And what’s the one book that you recommend to all up and coming transformation leaders?

It’s a book called Range by David Epstein. Epstein is a scientist whose research suggests that generalists, not specialists, are more creative, more agile, and are able to make connections that specialists can’t make. The revalidating as a liberal arts major.

Excellent. Well, that brings that transformation series on Risky Women Radio to an end for 2021. But I’m very excited to announce that our transformation journey will continue through 2022. Thank you so much Carol for joining us today and for your thoughts and valuable insights.

My pleasure. Thank you again.

Thank you for listening to this exciting episode of Risky Women Radio, to connect, champion and celebrate women in risk, regulation and compliance. I’m Kimberley Cole, based in Hong Kong. For more information on the Risky Women global network, head to our website, and the episode notes and please be part of the ongoing conversation by subscribing to this podcast, connecting with us @RiskyWomen on Twitter, or even reaching out to me directly by email.