CFA Society Jamaica recently held a webinar on “Managing Risk During Periods of Uncertainty” to provide members and key stakeholders with practical approaches to managing risk in times of disruption, particularly with respect to the COVID-19 pandemic.
The event covered market risk, enterprise risk, operational risk and credit risk. Presenters included current risk managers and investment managers practicing within the Caribbean region, primarily Jamaica, and comprised current members of the Board of CFA Society Jamaica.
While CFA Society Jamaica has 67 members, the attendance at the virtual event was close to 100 participants. These individuals included industry practitioners, candidates, and some non-financial sector stakeholders.
Mr. Brian Frazer, CFA, President of CFA Society Jamaica said, “A conversation to generate insights on market, credit, liquidity and enterprise risk management was extremely useful for investment practitioners, CFA Program candidates and other industry players. Navigating the impact of the Covid-19 pandemic is aided by having a framework that identifies the thematic issues, their potential impact and potential responses. The seminar was directly in line with the practical value-added dialogue that CFA Society Jamaica seeks to create with its members.”
Key points raised during the webinar, included:
- Risk should not be seen narrowly as a potential source of loss or damage to the value of an entity but should be considered as a potential opportunity to enhance returns and gain strategic advantages that would not exist under normal conditions, especially for entities with strong risk absorbing capabilities.
- The scale of the social and economic disruption, especially impact on social anxiety and fear, was highlighted as peculiar consideration for the current crisis, with long term implications for changes in persons' behaviour and increased use of technology.
- The value of robust continuity planning and the ability to adjust operational configurations and value delivery channels was identified as creating material value, with expectations that greater investments will be made by companies in ensuring resilience and flexibility in operational capabilities. Delivery of services through purely digital channels and the ability to maintain work and client relationships and interactions seamlessly across different channels are increasingly being prioritized, as well as the need to review cybersecurity arrangements.
- Integrated risk management was noted as a key area that will receive more focus in the future, as to some extent risks are still assessed in silos. Institutions will be required to place greater emphasis on how risks correlate and interact with each other across scenarios and how underlying behaviours change with market conditions.
- A reassessment of risk appetite and resiliency will need to take place for many entities, with continued focus on the traditional key areas of maintaining sufficient liquidity and capital adequacy. Similarly, the range of potential scenarios that are considered in contingency planning will need to increase, as a year ago a global health crisis that causes a disruption to production across most sectors would not have been in scope for many entities.
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