ING Direct Australia’s Chief Risk Officer speaks with FST Media about how data insights have helped ING Direct manage their risk finance and compliance requirements.

FST Media: What are your key priorities for the next 12-18 months?

Hellemans: I have an obligation to ensure that we define what our risk appetite is and that we ensure that the risk profile of this organisation stays within the boundaries of risk that is defined by our board.

FST Media: What are some of the key strategies or initiatives that you will introduce to help minimise risk and create value with micro-finance?

Hellemans: Risk is actually an integral part of decision-making around what we as an organisation do to engage with our customers and generate revenues. Where risk has played a crucial role is in ensuring that we at all times identify the risks that we incur and determine whether those risks are acceptable. If they are not acceptable, the key question for us is, ‘What can we do to mitigate them?’

We will continue to ensure that we value the management tools that we have, monitoring those risks and making sure they are managed within the level that we have agreed to. The reality is risk is part of our business and what we do every day. You cannot draw a mortgage or take on a deposit without actually generating a risk. The best way to translate a risk is if you have a failure in your risk processes, then the outcome of that is a reputational risk. In an institution, a financial institution predominantly, we have a liability in first order to our depositors and we have to ensure that we manage their assets in a manner that is prudent. Ultimately, we acknowledge that they work hard for those assets and we want to make sure that those assets are well-protected.  

FST Media: How does ING Direct balance supporting a social media presence with the risk of reputational damage that could be incurred?  

Hellemans: In the world today, any failure that you have in your risk processes – and that also includes failures in people, systems, processes and procedures – will have a consequence. We need to be mindful of the fact that there will always be a consequence that impacts either a specific customer or a group of customers. The reality of today is that with social media, your mistakes go to the outside world pretty rapidly. If you go back 20-30 years ago, by the time that errors were visible you were actually able to fix them before it became an issue. Today, it is almost instantaneous. Therefore, your approach to managing risk takes into account the consequence of almost a real-time impact. That places pressure on ensuring that there is a very small margin of error in terms of how you actually ensure proper risk management procedures.

FST Media: In terms of risk, what are the key challenges posed by emerging social and digital platforms?  

Hellemans: On a social front, the output goes out to the market immediately and our teams have to make sure that the engagement with the customer is there and transparent. We always need to make sure that we deal with the cause of the problem or risk by mitigating it in the most effective and efficient way possible so that the damages are limited in time. As far as digital is concerned, there are two key aspects of consideration: positive and negative. On a positive note, digital improves communication with your customers – it improves your ability to engage with them in a manner that is real-time, and tailored to every customer.  

The key disadvantage is that, when more of your customers are using these technologies, you are exposed to third parties. They will take advantage of digital technology in a way that is not necessarily positive.  

My biggest concern with technology is the ability to provide capabilities to people of a questionable background who can then use those technologies for their own benefit at the expense of our customers. This is something that greatly concerns me, particularly in the areas of cybercrime and fraud. The potential for a security breach is significant especially if our customers do not take the necessary measures to protect their own assets in that respect. With mobile phones, for example, people will put all their passwords in there, without even any form of protection. It is amazing how much information is available on those phones and the ability provides people of professional backgrounds to take advantage of that. Where my role comes in with that technology is to protect those assets of our consumers. To facilitate this protection, we use technology to monitor the traffic that is being generated through those platforms to identify any abnormalities and take appropriate and immediate action to ensure that our customers are protected.

In terms of protecting our customers’ assets, we do have at our disposal relatively sophisticated tools that allow us to detect potential problems before they actually even happen. When we do see those issues arising, we immediately come back to the customer to ascertain whether it is a genuine process or whether indeed something’s gone wrong. We perform this very well and our ability to do this in an effective and efficient manner is what adds to a customer’s perceived value of who we are.  

FST Media: What are your greatest challenges around regulatory compliance and reporting over the next five years?  

Hellemans: My biggest challenges revolve around regulatory reporting. We live in a dynamic world, full of ambiguity, where regulation never ceases to stop – whether it is APRA, ASIC, AusTrac or all of the OECD. It just seems that we continue to be subject to an increasing amount of reporting and compliance regulations. While I do not necessarily question the genuine concerns that these are trying to address, I think in many ways it makes it complex and very complicated for us to continue to meet those challenges. It is part of the new investment-intensive world in which we live. It is not going to stop and we just have to deal with it.  

FST Media: How do you ensure data consistency across your regulatory and reporting requirements? 

Hellemans: In the domain of data information management, there are a number of key principles. Firstly, you have better definitions and they are consistent with metadata in our dictionary. The same specific definition for the same terminology applies across the organisation; there is no room for interpretation. If a new definition comes up, we spend a lot of time discussing it extensively, but once it is defined it is applied consistently across the organisation. We have one place where we have a single version of its true application, and that one place is our central database, and out of that database comes all the reporting we do.  

FST Media: How have data insights helped your team manage your risk finance and compliance requirements?

Hellemans: Risk people are, by definition, “data junkies”. I have an expression that I use internally quite often and that is: if you have a lot of information and you are not able to filter it through in a manner that makes sense, you may end up looking at the roots of the trees in the wrong forest. It is not about the quantum of data. It is about the relevance of that data and how it is used. I use data regularly for its ability to validate what I think in many ways or what I already know is common sense. Where big data becomes relevant, is not so much in the world of risk, but in how we interact with our customers. It is about how you can actually engage with your customers in a manner that is tailor-made to the consumer based on that consumer’s needs. The only consideration is we have to find a balance between the use of our data and the privacy obligations principles that we are committed to.

FST Media: How do you encourage a culture of innovation within your own team?

Hellemans: The key to encouraging a culture of innovation is about instilling a mentality of trying new things and not worrying about failure. You are not going to innovate if you do not make mistakes. There are some mistakes that you learn from and I think our team need to be encouraged to not worry about failure.

FST Media: What technology or innovation has had the most significant impact on your career?  

Hellemans: When I first started out in banking and began my training as a cashier, I still had to work with a double ledger, manual entries and do tallies at the end of the day. In my first overseas assignment, I had to do a long presentation using a telex machine. Ultimately, if you look back at my 38 years in banking, I have seen quite a lot of technology being introduced over time that, in one way made life easier, but in another way made life more complicated. In the old days when we did not have mobile phones, we went home and relaxed. Today, there are people that will take their mobile phones with them to bed and are always online, even in the middle of the night. 

Quite a number of technological changes have had an impact on my career over time, and I am sure that in my remaining time as a professional banker and risk manager there will be a few more coming. I cannot give you one specific technology or innovation that has had the most significant impact on my career, but I can say that I thought one day a fax machine was the best technology ever invented. Now nobody uses it anymore. In one professional life cycle, I have seen new technology die. I was telling someone not too long ago that when I worked in an office and when we had a fax machine, it was a big event when you used it because everybody used to sit around that machine – it always reserved for very important documents and took 10 minutes for one page. It was also very exciting when emails were first introduced. Today, there are a lot of people that do not even respond to the emails anymore. In my view, I believe that the best technology that exists in any business tool is verbal communication; there is nothing greater than face-to-face interaction.  

FST Media: What are your three most important qualities for a leader?  

Hellemans: Currently, I view my role in terms of leadership in two parts. One is leading my own team of high value specialists and the second is my role as a member of the management team of ING Australia. In the first instance, in terms of managing my own team what the quality of leadership is, it has always been about empowering your people. A key trait of a leader is someone who trusts his staff to do the right thing; someone who gives them enough rope to do what they need to do, and encourages them to take initiative. All team members are accountable for their commitments, but we cannot not blame them for the mistakes they may have made, as long as the mistakes do not get repeated. It is also about being clear and precise in terms of what your expectations are, and giving your team the platform to deliver on that. Regarding my other role in the member of the management team, I have had a lot of experience in the industry. In the end, the key to this management role is to contribute and be there to make sure that people can learn from your experiences. As a risk manager, I believe that my role is not to mitigate risk but rather to know what risk we have. It is about knowing what we are doing in terms of managing risk and get rewarded for what we do. 

FST Media: Every leader has a legacy that they wish to be remembered for, what is yours?  

Hellemans: A leader is always reflective of the efforts of his team so I think the best way to answer that is that you should ask the people that engage with me on a regular basis and what their answer is. In the end, there is one thing I have always prided myself on and that is being direct and transparent. I listen to all the facts presented and I make a decision pretty quick. I may not always be right and I am willing to admit when I am wrong. Ultimately, the simple lesson here is that if you are fair to people, then people will be fair to you.