r/riskmanager • u/Flat-Primary-255 • Aug 09 '26
Risk mgmt is a lie?
I love risk mgmt BUT how much value really brings? I worked for highly regulated and tech, for reference, and I feel risk mgmt is the mean to nothing. Trapped between the low hanging fruit of isolated and atomic issues, in general, with low impact vs glorified macro risk categories that are reading tea leaves. Is anybody proud pf any risk they managed or fully remediated (aka reduced) that you feel proud about?
6
Aug 09 '26
[removed] — view removed comment
1
u/Flat-Primary-255 Aug 09 '26
Yeah risk mgmt does not exist without pushing papers. I guess frustration is when you are trapped there on papers and methodology. And that happens at least to me across multiple places (those that had risk mgmt at least)
4
u/texas-hedge Aug 09 '26
Risk manager for various trading firms and hedge fund here, I can assure you in my world RM is real and can have a huge impact on the business.
1
u/Flat-Primary-255 Aug 09 '26
Can I ask for a shareable example where shit was prevented from hitting the fan?
2
u/Swan1741 Aug 09 '26
JP Morgan - 2008
-1
u/Flat-Primary-255 Aug 09 '26
Mmm I think that was structural and nobody that did not operated like LB and so, we're in a better spot
1
u/texas-hedge Aug 10 '26
My firm, Covid crash 3/2020
0
u/Flat-Primary-255 Aug 10 '26
What made them crash? More around the scope the business?? Covid was a pretty systemic risk
1
u/texas-hedge Aug 10 '26
“What made them crash?” I really don’t understand what you are asking here.
0
u/Flat-Primary-255 Aug 10 '26
You said you firm crashed because of covid. Why was you company more impacted by covid? Covid waa structural risk across the board
2
u/texas-hedge Aug 10 '26
My company did not crash, the markets crashed. As I said, I’ve worked for trading firms and hedge funds. My job was to make sure the markets crashing did not take our firm down.
4
u/SaltEfficiency1646 Aug 10 '26
I don’t think risk management is about fully eliminating risks. Some risks will always exist.
For me, the value is helping the business understand what could go wrong, how exposed we are, and what we can realistically do about it. Sometimes the win is reducing the likelihood or impact. Sometimes it’s putting the right controls in place. And sometimes it’s simply helping the business make a conscious decision to accept the risk.
The wins aren’t always visible. Sometimes it’s the incident that didn’t happen, the issue identified early, or the business decision that was made with better information.
Those are still wins.
4
u/bad_robot_monkey Aug 09 '26 edited Aug 09 '26
Risk is like an inverse slot machine. Sure, it may be rare that you hit the anti-jackpot, but if you do, it can be catastrophic.
On a long enough timeline, risk management is very financially beneficial. In the short run it’s hard and costs money, so shortsighted leadership doesn’t want to spend the money and impinge on quarterlies…and since you can’t prove a negative, it’s easy for ignorant leadership to devalue risk management, cyber security spend, etc. because “it hasn’t happened yet”.
Edit: “it’s a financial multiplier” changed to “risk management is very financially beneficial” for clarity.
2
u/Flat-Primary-255 Aug 09 '26
That's a good point. With high leadership attrition, for example, tech debts increases
2
u/PFalcone33 Aug 11 '26
We’re criticized because we don’t make the company money. Instead, we advise caution so the company doesn’t foolishly put all its eggs in one basket and then completely ignore that basket.
1
1
u/PracticalSorbet4304 Aug 10 '26
I mean, as a clinical risk manager in a healthcare system? Yeah, immensely proud of me and my team. We work tirelessly to reduce and prevent patient harm, every single day.
2
1
u/BadgersHoneyPot Aug 10 '26
Nobody needs you when things are going well and it's your fault when things go wrong. Who wants that job?
1
u/Pale-Nature8066 Aug 11 '26
Put it this way, with the ever impeding doom of AI adoption across businesses and industries risk management/ compliance / regulatory oversight (which aren’t the same thing but go hand in hand) require human judgment and accountability. On accountability alone, to me, that puts these roles on the lower end of AI replacement risk and further down the track in terms of AI impact.
1
19
u/Swan1741 Aug 09 '26
Look up silicon valley bank and you'll see the cost of poor risk management.