Podcast S7E3 | Risk Management is a Revenue Enabler: Helena Frumson

TRANSCRIPT

Kimberley Cole 0:01
This is Risky Women Radio, a show that connects, celebrates and champions women in risk regulation and compliance. We’re here to share the insights on the biggest issues in our industry and hear inspiring journeys from our global members. Sign up to our newsletter at riskywomen.org. I’m Kimberley Cole, your Chief Risky Woman.

Kimberley Cole 0:21
Welcome to Risky Women Radio. Today’s risky woman is Helena Frumson, Managing Director, corporate and business development for EMEA at Numerix and co founder of Infinita Club. And before I kick off with hearing all about Helena, let’s just give you all a couple of actions. Can you please sign up and follow us on all of our Risky Women social channels, Instagram, X and please also join us in the LinkedIn Group. Make sure you also go to our risky women website riskywomen.org and sign up for our Roar newsletter so that you don’t miss anything that’s going on including when the latest Risky Women Radio podcast is released. We’ve also been super busy at Risky Women we’ve added Rev-up sessions to our repertoire, we aim to have at least one Rev-up session per month and for members these sessions are part of your membership. Risky Women has many different elements from live events to podcasts and our Rev-up sessions are aimed at building on your already amazing superpowers. Session so far have included media training with Chris Dobson, voice and gravitas with the amazing David Pope, storytelling with Sundari Mukherjee, we did How to Write a Book with Jennifer Geary which was fantastic, and Negotiating for More by Black Isle dynamo, Heather Linhardt, and there’s plenty more to come so make sure you go to our website and sign up to be a member. But without further ado, let me introduce Helena. She is going to talk about risk management as a revenue enabler. So with 25 years in international leadership, Helena excels in scaling organizations and crafting impactful business cases. She is trusted by CEOs and investment funds and drives strategic decisions and fosters growth through alliances. Passionate about commerce, innovation and teamwork. Helena’s expertise spans finance, education, and fashion. So I’ve given a very brief introduction. Welcome Helena. Now, in your words, tell us your story.

Helena Frumson 2:48
Thank you so much, Kimberley. And thank you for inviting me. I’m excited. And I especially appreciate the emphasis on fashion. Of course, it’s very relevant to risk.

Kimberley Cole 2:58
Well, you’re looking very fashionable.

Helena Frumson 3:00
I’m trying to level out here. Thank you. My story is, you’ve captured it quite well, I started my career from fascination about commerce and commercial diplomacy. I’ve ended up serving in three fields, officially education, fashion, and financial technology and finance eventually. And as a side kick I also since 21 years ago, I’ve advised and consultanted, startup CEOs and founders on their commercial strategy, and on a way to shortcut the runway money burning period during the setup of a startup phase. So that’s about me. I come from family where my mom says we don’t have salespeople in our family. This is as much as my family is linked to commerce. So that’s a bit of contradictory to my career. But I tried to convince everybody that not every bad thing that you see in life should be called sales and commerce. I think we’ll get to it with couple of use cases here.

Kimberley Cole 4:06
Excellent. Excellent. So you’ve got a couple of different I guess, firms that we named in the bio there that I gave. So can you give us a brief overview of Numerix? And also tell us about Infinita Club?

Helena Frumson 4:21
Absolutely. So Numerix I love the new line of Numerix since our rebrand, it sounds when numbers matter. When numbers matter, people tend to come to Numerix both in front office and risk division, advisories, consultancies, audit and even regulatory market. Numerix works with a tremendous amount of players on the market and one of the biggest use cases that you may have heard of is the unwinding of Lehman portfolio where Numerix acted valuation agent, and many more since then many more successes for capital allocation and risk management, holistic risk approach really across different desks in a bank or any financial institution.

Kimberley Cole 5:05
Excellent, very interesting. And what about Infinita Club?

Helena Frumson 5:09
Infinita Club is my little baby. It’s a realization of my love to commercial diplomacy, where I connect between people of different backgrounds, whether it’s capital and startups, or whether it’s advisng startups and how to get up to speed. It’s still very young, it’s only about eight weeks old. But I hope for a bright future for this baby.

Kimberley Cole 5:31
I love that “commercial diplomacy.” And from what you describe to me as well, it’s almost like you’re building an ecosystem of connection.

Helena Frumson 5:40
I am a person of ecosystem. And I think that peace and love on this earth will come from commerce, faster than from diplomacy or from politicians, let’s say.

Kimberley Cole 5:52
Very good, very good. Now, thinking about your career, what was the biggest risk that you’ve taken? And do you think it paid off?

Helena Frumson 6:01
The biggest risks so far, and I hope that the biggest risks are still ahead of me, of course. The biggest risks so far, was jumping on board of a little startup company, which didn’t make any money, but invited me to come and be CEO for the company, at the age of 25. I was super proud of myself, you may imagine. And there was a success story with this company. But the risk, of course, was to never come back into my corporate career, and come back to corporate career actually was quite difficult after this jump. But I learned a tremendous amount of lessons for life, which serve me today very well.

Kimberley Cole 6:45
Interesting. And getting back into corporate was just a timing challenge?

Helena Frumson 6:50
It was timing, it was having children, we women may appreciate that penalty. But it worked. In the end.

Kimberley Cole 6:57
Always interesting to see those twists and turns. And if you were going to give advice to your younger self, when you were starting out or thinking about people starting out, what would you give thinking about your career journey?

Helena Frumson 7:11
It’s a very interesting question, because first that comes to your mind is, of course, what could I have done better in my achievements, or, or mentoring and supporting others, but actually, I’ll focus on self care and love to your own self and care for your own body. Because this is the ultimate automobile that drives you through life, which I didn’t appreciate. I felt too invincible, to really care for myself. And I had to learn it the hard way. And thankfully, I had great mentors that helped me understand that unless you really look after yourself, there’s very little you can do for others.

Kimberley Cole 7:49
Yes, it’s that analogy of when you’re on the plane, yes, they say, put the mask on yourself first, before you put masks on others around you.

Helena Frumson 7:57
That’s exactly what my mentor used as analogy. Thank you Kimberley!

Kimberley Cole 8:02
There you go! So fascinating career journey, and as you said, you think there’s probably more risks and more opportunities ahead. So that’s super exciting, as well. But to end this section, can you tell me who inspires you so are there risky women or just women in general, that inspire you?

Helena Frumson 8:24
It’s a very tricky question. If I start naming people who inspire me, the list will be just incredibly long. I tend to turn to historical figures for inspiration because these people, these women often would stand up to environment that was not necessarily voting for them from ancient Egyptian times, or queens, all the way to contemporary women who inspire me to take the leap to take that risk we talked about and one person that probably will name is my mother, her name is Tamara. She’s economist and she’s the one person who thinks that we’re not in sales here. Her resilience and her ability to remain focused and structured at all times is just incredible. Now she’s not an easy person. I didn’t say that. That was the case. But certainly she has inspired me for my career. She is the go girl and so is my dad and my husband. And I have two best friends who were with me at all times. One of them is lawyer and another one of them she’s PhD in mechanical engineering and she’s a technical person. But both of them are always go go no matter what happens, how low or high you are they’re there. And they are an incredible achievers.

Kimberley Cole 9:42
Fantastic. And I think that’s another good thing. A good piece of advice. Is that sort of creating your own personal board to support to guide to mentor to advise.

Helena Frumson 9:53
Absolutely. I mean, eventually your face these people sitting on your shoulders, you know, two different shoulders and same contradictory things. You may Imagine but this is the personal sounding board for sure.

Kimberley Cole 10:04
Okay, let’s take a break before we get into risk management as a revenue enabler.

Kimberley Cole 10:10
I want to tell you all about our most recent initiative, which is Risky Women Write. It’s our writing competition. At Risky Women, we want to continue to amplify the voice of women in the industry, and champion our thought leadership capability. So in partnership with Bovill Newgate, we are pleased to announce the Risky Women writing competition, Risky Women Write. Given statistics from the recent women in media gender scorecard, we see that continually we are severely underrepresented in terms of media coverage as both sources and experts. Women only account for 43% of by lines written, and men are generally featured disproportionately as 70% of quoted sources and 66% of experts. So we want to address this imbalance and showcase some hot topics and give you a chance to show your knowledge in the risk and compliance arena said go to Risky Women website. That’s www.risky.women.org To see all the details and get your entry in now.

Kimberley Cole 11:24
Okay, Helena, tell us more about risk management, we want to talk about it as an enabler, however, it’s often perceived as a roadblock. And you really see the function differently. And as that real business enabler, so tell me more about that.

Helena Frumson 11:46
It is very interested in how we use the word perceived or pictured, portrayed, because it really isn’t. But it’s perceived that way, whether to explain why we’re not successful enough in the front office, or to simply conflict and get it out of the way. So whatever you want to do will be permitted. And this is a boundary division, right. And unfortunately, or fortunately, we women find ourselves often in setting the boundaries for family, for friends for at work. So to me, it is absolutely a revenue enabling division. It sets the right boundaries, within the framework of which you can truly benefit yourself organization and your shareholders and build trust with your clients. One of the biggest obstacles to peace, if you will, between banking sector and regular Joe and Jane and myself out there on the market. After the crisis of 2009 2008 was lack of trust, people simply didn’t trust banks. And we had a beautiful roundtable in Ireland in Dublin with C level banking community, each of which said, Where’s the trust? How do we build trust? And so it is risk managers, actually, who voted themselves into this position of let’s build trust. Again, let’s demonstrate tha responsible that yes, we want to be adventurous, we want to invest, but we want to put the right boundary and you dear shareholder, and you dear regular person taxpayer who bailed us out, can sleep well. We’ll do well this time around. And systemic risk is not to come again from us.

Kimberley Cole 13:32
Which is interesting, because that’s taken that risk function to the C suite as well.

Helena Frumson 13:37
Absolutely – propelled it to the board. Because someone adult had to come to the board and explain to people, that are not necessarily technical, how the toxic portfolios / less toxic portfolios that they are sitting on translate into an opportunity or maybe the lack of opportunity for the banks. And then we saw a terrible amount of toxicity disposed of in the banking portfolios in 2012 2015 2016 and so on.

Kimberley Cole 14:05
Yeah, interesting. And often, some of the things that I think we see is that, if nothing goes wrong, that risk and compliance is obviously it’s working very effectively. But often the value is not realized. So how do we manage that issue that we’re kind of dismissing when Risk and Compliance works well as having no value?

Helena Frumson 14:32
I would say that from my perspective, and in my humble opinion, the way to not let people dismiss this is just to speak up. And to explain and market what is it you’re doing across organization? Organization consists of humans, humans buy into certain messages. You’ve got to build your coalition, your alliance, right? Why to not go around in times of peace and explain exactly how you enable the front office to succeed? And what is it you do to build the trust with your taxpayers and with your clients? And how do you benefit shareholder in the end? Something like RWA’s directly translates into share value? It’s quite easy to actually sell it upwards, sideways and downwards.

Kimberley Cole 15:22
Interesting. Yes. So what does success look like when risk and compliance is really working well? And what do you see are the real measures of success?

Helena Frumson 15:34
I see, first of all, of course, for financial organizations, we want to see the share volume going up, right? We want a steady resilient business model that is not vulnerable to shocks and turbulence on the market. We want to see the ROIs with the right capital allocated into right areas of the business, right portfolios and right asset classes. We want to build again, I’m probably broken record here, but we want to build trust with the community. And to do that we should avoid use cases like Silicon Valley Bank collapse or the 2008 crisis, even like the examples that we’ve discussed earlier regarding Credit Suisse. And some will say, Oh, you know, people just asked to be more commercial, I would avoid calling all things bad corners. Again, I would say that was utter compliance with wrong identification of a client, wrong ranking of a client and wrong pipeline creation. So I would say probably, again, share value, return investment, trust with the community, and of course, well oiled communication within organization – when one division isn’t seen as inferior to another.

Kimberley Cole 16:57
Yes, that is often part of the challenge, isn’t it? An interesting, you mentioned capital allocation there, because part of that effective risk management means that you often would have better capital allocation, better, you know, not having to allocate so much funds, etc, in particular areas. So I think there’s lots of things that play into how the risk and compliance function can really be a revenue enabler.

Helena Frumson 17:25
Absolutely. And risk and compliance to those motivated people in front office, they can give options. That’s the beauty of it, it’s not everything that person does, you know, we’ve slapped and punched, no, don’t do it. With the right framework, we don’t say don’t do it, we equally as much say, Don’t do that, but here are five other options, each of which presents a tremendous opportunity for the whole organization. So by doing it, not just you benefit your front office performance and KPIs OKRs or whatever you name it. But you benefit the whole structure, the whole ecosystem and food chain, from top management and bank all the way down to again to simple consumer of banking services, we’ll be able to withdraw his check in end of the month.

Kimberley Cole 18:14
Excellent. So given all of your years of experience and the customers that you’re dealing with, what is the landscape that the current risk compliance professional is operating in? And what do you think are the key attributes of those superstars? In that function?

Helena Frumson 18:35
I see. Again, my vision is just my vision, of course, I see first of all you need to learn to say no, without calling for calamity and tantrum and throwing toys out of the pram, across the table. You need to learn to demonstrate that the framework that you’re offering is actually a healthy environment for successful business and revenue generation. Because this is what business is about. It’s about benefiting shareholders, generating revenue, and surviving. So that ability to say no, and to be attentive to detail and to be to certain extent diplomatic, but with essence and content in this diplomacy, are the key attributes that I would allocate to this position with my view,

Kimberley Cole 19:26
Great. Thinking about the individual, so the ones who have got some of those attributes, but what do you see is the opportunity for risk and compliance individuals because we talked a bit about this opportunity of now this is at board level. So what are you kind of seeing in terms of career development and career options?

Helena Frumson 19:49
I certainly see a possibility and desire across CROs to get into the board position, not always these people make it to the board or make it to the board that this same wanting and amount of attention that they deserve. And I think that there is a way to go, there is quite a bit to be done. And again, across my network across female CROs, I do see that often it’s unrealized desire. And they keep moving organizations until they find that place where they can have access to the board. Although we also hear boards complaining that they don’t have enough women in pipeline, which is almost as if it contradicts the first statement. I believe that there is potential, I think we will see more chief risk officers in the boards, I think we will see more chief compliance officers more ESG related positions in boards, simply because the whole world goes that direction. And the positive side of it is that today, these people are taken seriously not just by organizations, but also by providers, suppliers and vendors. For instance, I just spoke with CEO of a brand new clearing house that has been put together in Europe. And the first stage that he had in his mind is we need to make risk managers comfortable. We need to make risk comfortable, we need to provide them with ____ reporting and and all that. So there are many people in the ecosystem, who already think about risk manager and risk position as very significant decision making department in the institution.

Kimberley Cole 21:34
Great. What are you seeing in terms of risk’s functions leveraging technology and more strategic thinking, I guess, to ensure that the overall institutional health is there with an organization that you talked about that sustainability, but also from a growth perspective?

Helena Frumson 21:52
Absolutely. It’s a great question, it’s actually very easy for me to see it because they see the most from chilling from sidelines, if you will, I had a dinner with the chief risk officer in an organization which my department sold to. And it was a revealing meeting for me because I do feel the pain. But sometimes I’d love to also see the success story. We were sitting in there, and that chief risk officer tells me you know, what, our share value just went up. I said, How did it happen? He said we had this big portfolio of dairy complex derivative products, which they couldn’t value properly. But he said, we managed to value them properly with the right technology, which at that stage was Numerix. And then he said, as soon as we were able to value we passed our audit with a great success. So the auditor, bigm four auditor, put that stamp Halal, Kosher or whatever you prefer to think of it. And after passing the audit, the ranking agency actually increased upticked their rank. And that inevitably led to a positive outlook on this company by not just existing shareholders, but by new shareholders, it’s public company. So all these food chain demonstrates that one little change and one little control function, or one little ability to take control over a particular function can lead all the way to change in the share value. And I think it’s tremendous success.

Kimberley Cole 23:32
A real ripple effect of like throwing a stone in a lake. Very interesting. And I guess now, if you think of the future, what do you predict for the future of risk and compliance both for departments, but the individuals who make them up? What’s your vision of what’s going to be next?

Helena Frumson 23:52
I think we will see more of a pipeline of interesting smart individuals even better pipeline coming into this divisions. Because this divisions become very important compared to 20 years ago, we all know exactly where risk management wasn’t what was the attitude and which language front office would speak about risk management is different today. Today, if Risk Management allows, we can do it we can issue a new product, but then if they manage to shorten time, or timeframe work, within which we can issue that product from nine months to three months, then that’s amazing. So they actually start seeing it, risk management becomes more appealing. I think more and more individuals are interested in these roles. ESG is growing as part of you know, overall outlook on responsible and ethical investments, compliance certainly. I think we’ll see more empowered people in this divisions more confident, more agile to deal with the changes on the market, economics, politics, etc. and more respected. And as a result, I believe there will be more collaboration and institutions will become just healthier. There will be another pillar, if you will, upon which they can rely and move on in a healthier way.

Kimberley Cole 25:14
Great. So in summary, then, when we’re thinking about risk management as a revenue enabler, key is absolutely that using risk and compliance to build that level of trust. What are those other key things that our listeners should keep in mind?

Helena Frumson 25:34
Building trust, enabling revenue, allowing or enabling the right report and region to share value to go up. And certainly avoiding systemic risk for the whole market, which is so important because it attacks the whole economy and the whole country or global situation.

Kimberley Cole 25:55
Great. So I think good opportunity for individuals in the space, but also such an important function for all of our institutions. Now we’re on to our Risky Women wrap up or our Rants & Revelations, as I like to call it. So the one that we ask all of our risky women, are you optimistic or pessimistic or neutral in your outlook for the year ahead?

Helena Frumson 26:19
So very good question. It’s a difficult question. Because we live in very interesting, uncertain times. I am optimistic by choice, not naturally. But by choice. I choose to be optimistic. Things are shaking in the market. But I stay optimistic.

Kimberley Cole 26:38
Excellent. I think we have a lot of risky women who remain optimistic, which is good. Now, what would you describe or what do you think is the top risk for the year ahead?

Helena Frumson 26:50
If I remove from my horizon, all the digital assets, and the emerging technologies and the potential risks of those, and financial markets, and generally on our lives, I probably will look at politics. And say that elections, we see how turbulent is elections year for many countries, what it leads to, and how that demonstrates on the streets of different cities. We have right next door to us in Ukraine, Israel. And I see that the risk quite a calamity globally, around political situation. However, I think the biggest risk than that is actually potential dictatorship or totalitaria that may emerge out of this turbulence, because people, we have a problem. If we don’t handle this problem properly, then people may automatically vote or opt for more dictator environment, may be benevolent dictators, but still dictators. That I would see as a risk not just buy economies and finance, but generally for us and for our future of our children.

Kimberley Cole 28:04
Yeah, there’s so much geopolitical risk at the moment. And something like two thirds of the world going through elections this year. So it’s a massive political upheaval everywhere. So yes, very true. And we touched on this a little bit, but what’s your best advice? For the next generation of compliance professionals?

Helena Frumson 28:26
I would say, to remain positive, yes. To remain optimistic. To learn to say no, and to learn to say yes, intentionally not because you’re pressed or cornered, or ambushed, but because you believe that this is the right thing to do. For we already saw what happens when we don’t say no or yes, intentionally.

Kimberley Cole 28:50
Okay, good. And then, on a more lighter note then, a book to read something to watch, and or a podcast that you recommend?

Helena Frumson 29:01
Well, the two books that I have in mind are not light at all, but I will still recommend them. First one is called Menticide or The Rape of the Mind by Joost Merloo, who was a psychiatrist and resilient anti-Nazi activist in Netherlands and this precise links to the topic of dictatorships and how to spot a dictator, and how to stand up to that opportunity. With no thank you, potentially, and another book that I really loved, and I discovered that many women don’t know of is The Beauty Myth by Naomi Wolf. I really recommend that book for any mother of a girl or a boy, or really for any mother, for any parent, for ourselves. I think this book tells us quite some information that we should have learned when we were 15. But we didn’t. So it’s good to, better later than never at least it was for me.

Kimberley Cole 30:08
Yes, that’s true. The Beauty Myth I read that many years ago, but yeah, good reminder on some of these books that are out there that maybe worth going back to. So now, maybe you can leave us with some inspiration. So what’s a key message, a word or a quote that you would like to end on to inspire our risky women?

Helena Frumson 30:31
Absolutely. Let me share a quote by my father, which made me into an optimist. There are no hopeless situations, think this message I’ve heard 1000s or 10s of 1000s of times. And I live by this message – there are no hopeless situations. In any situation, we can find a way out of it. We can collaborate, build alliances, find our inner strength when we think we don’t have but there is a way out of it.

Kimberley Cole 31:04
Well that is lovely, thank you very much Helena for sharing how risk can be a revenue enabler and all of those other very thoughtful career aspirations and ideas there. So that’s brilliant. Thanks for joining us.

Helena Frumson 31:21
Thank you so much, Kimberley, for inviting me for this beautiful recording in this beautiful studio in London. I appreciate your time.

Kimberley Cole 31:29
Pleasure. Okay, so that’s a wrap for today’s Risky Women Radio few more actions for you before you go if you can, on whatever is your favorite podcast channel, give us a five star rating and maybe leave us a message and Risky Women has now connected, celebrated and champion women in risk, regulation and compliance for 10 years. And we’re continuing to grow and expand our network. So please become a member or lead a group of risky women by becoming a ringleader. So just go to our website riskywomen.org and click on the membership link. And don’t forget to sign up or follow us on all of our social channels Instagram, X and join the LinkedIn Group as well. And sign up for the newsletter so that you don’t miss anything that’s going on from events to when the next Risky Women Radio podcast is released. So thank you for listening and we will see you at our next event or hear you right here on Risky Women Radio.