Our host of Bots & Thoughts, Jimmy Hewitt, recently sat down with Ram Naidu at the OPEX (World Annual Operational Excellence & Business Transformation Summit) conference in Orlando, Florida. Ram is a business leader who has spent his career in the consumer lending space, specifically responsible for managing risks and controls. Consumer lending is a highly regulated space and therefore the stakes could not be higher with regards to managing risks and controls. In addition to this, the sheer volume alone at Wells Fargo requires the sophisticated application of automation into managing risk and controls at scale. Listen in as Ram, Head of Control Evaluation for Consumer Lending at Wells Fargo, tells his story, talks you through his methods, and lends you his perspective on applying automation for risks and controlled management for one of the largest banks in the world!

Watch Episode 19 interview now!

Follow along with the episode now!

Guest: Ram Naidu, Head of Control Evaluation for Consumer Lending at Wells Fargo

*The views and opinions expressed here within are those of Ram himself and do not necessarily reflect those of Wells Fargo

Business leader at Wells Fargo

Spent his career in the consumer lending space

Responsible for managing risks and controls

Consumer lending is a highly regulated space

High stakes with regards to managing, risks, and controls

Sheer volume of at Wells Fargo requires the sophisticated application of automation into managing risks and controls at scale

Started career in manufacturing

Spent several years in transportation and logistics

Financial Services

Joined financial services over 20 years ago and have been in the space since

Spent time in risk across all three lines: internal audit, corporate risk, and the business

Spent time running large global operations

Was a financial controller at one point

Saw transactions flow into the balance sheet, income statement, and the other financials
Provided a unique perspective
Saw the impact to financials

Risk Perspective

Looked at items from a customer lens and growth standpoint
Looked at items from a regulatory lens and company impact

Operational Excellence

Risk Proactiveness

Companies that have really good risk management practices also tend to have very good operational excellence practices, and they tend to be more proactive

The way they detect risks (example: KPIs) is more proactive in nature

Through operational excellence, process modeling, KPI setting, and more within process, your company can become smarter and can detect early indicators of a future risk before it happens internally or externally

Challenge

People, companies, and everything changes
The struggle that a lot of organizations have is they might get mature at a particular point in time with a specific risk, but then the landscape changes again
As the environment and landscape changes, the risks and what you have to manage are also changing

If you have proactive measures in place and have a really strong operational excellence, then you can generally deal with changes much faster than a company that is not prepared

Your company can even mature further, from proactive to creative and innovative

Controls

Ram’s Role/team: evaluate controls

Wells Fargo has a process in place to create process maps that define what the risks and controls are and then they evaluate whether the controls are actually working

Part of the team’s responsibility is to identify process gaps as they evaluate the controls and provide feedback to the business leaders so that they can implement changes
Goal: Identify risks before they manifest with a customer impact or process impact
- Example: ensuring bank statements are actually sent
- If you have a million customers and 900,000 of those million are eligible to receive a statement, then having a process in place to ensure those 900,000 people are receiving one

Process Mapping:

Process map everything out
Identify stakeholders, customers, handoffs, dependencies
Decide where you have controls in position
Decide if there are gaps where you need to design controls so that you can actually then monitor those controls.
Then when you do have controls, you want to make sure you’re monitoring them periodically

Automation:

Many controls can be automated, and many are manual
Still a lot of opportunity to automate data
Process mining technology has gotten very good in this space
- Can get log data from whatever system you are using
- Not only can you extract the process map, but you can also find the business rules that go into why a process went one way versus another
- Can see this being a key to the next phase of automated risk and control management

Culture

Current role: Head of Control Evaluation for Consumer Lending

Diversity of experiences has led to his role
Important part of the role is to understand what the business is trying to accomplish and then go in and understand the process, risks, and controls

Culture: be partners and proactive

You want to be partners with business leaders and their teams so that you can be proactive, raise your hands, and lead from the front
Don’t simply react to what is on paper
Proactive culture is essential

Consumer Lending Processes:

First, establish the “North Star”
- When they go into any business area or process, the first thing they’re trying to do is understand what the objective and scope of the process is
- That business objective then drives the control objectives

Ask:

“What are all the things that can go wrong in trying to achieve that business objective?”

“What are all the things we should be looking for to see if management has routines to actually monitor those risks?”

To evaluate risk and controls, you’re really looking to find:

Every way a process can go wrong

How management is monitoring those processes

Goal: you are proactive in detecting issues and can fix the processes and monitoring efforts

You can have a combination of controls

Key Ideas from Episode:

If your company is really good at operational excellence, your risk management is usually proactive
Process map everything out, identify your risks, decide if you have controls in place or if there are gaps where you can design controls, and then monitor your controls periodically
There is a lot of opportunity to leverage data and automation
Be a partner within your teams, with other teams, and with business leaders in order to be proactive and lead from the front
Must create a proactive culture to detect issues in order to improve processes and monitoring procedures
Mature from reactive, to proactive, to creative and innovative!

WATCH EPISODE 19 INTERVIEW WITH Ram naidu NOW

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