Organizations operate in an environment filled with uncertainties. Effective risk management equips them with the tools to navigate and thrive amid unpredictability. Organizations need to grapple with both known and unforeseen risks that have the potential to disrupt operations and hinder progress. This generates the need for a systematic approach to identify, assess, and manage risks.
In these uncertain times, the role of risk management experts becomes crucial. These experts provide a framework for decision-making, resource allocation, and strategic planning to enhance overall resilience and sustainability.
Sophie Dupré-Echeverria, one of those seasoned professionals in the realm of risk management and compliance, has donned the role of Chief Risk and Compliance Officer at GIB Asset Management, overseeing both SMF 4 (Risk) and SMF 16 (Compliance) responsibilities. With a wealth of hands-on experience spanning various facets of risk management, Sophie brings a comprehensive skill set to the financial landscape, particularly in the domains of banking and asset management. We had the pleasure of discussing her risk management approach with her.
Below are the highlights from the interview!
Can you provide a brief overview of your journey in the field of risk management and how it has shaped your professional trajectory?
After graduating in Economics and finance in Lyon, where I grew up, I obtained a master’s in Organisation and control of Financial Market Activities (also called ‘’Back Office or MoM’). It included a 6-month internship, which I spent in the capital markets Middle Office of the Credit Lyonnais in Paris. That prepared me well for my first role in the market risk function at SocGen. In my early years in Finance, I did not specialize in one specific Risk practice, which helped me avoid being ‘pigeonholed’ as an expert. My career spans the full spectrum of Governance, Risk, and compliance. I have held roles in financial and non-financial risk, progressively taking on a wider range of responsibilities. Today, I am Chief Risk & Compliance Officer at GIB Asset Management, where I oversee both the banking and the asset management business with my team’s support.
Who or what inspired you to pursue a career in risk management, and how have those influences impacted your approach to the field?
I grew up surrounded by teachers, so I had very vague ideas about business, let alone Finance and Capital Markets. I was initially attracted by the opportunities offered by the Master’s, where a paid internship was guaranteed, and almost all students found their first role straight after obtaining their diploma.
I enjoyed the discipline and structure underpinning risk management and the fact that it involves interacting with all functions across the value chain of the organization.
When I started in Risk Management, there was an active, self-organized network of Risk professionals who shared best practices in a very open way, and that inspired me to remain connected to trade associations. I acted as deputy chair of the Risk Forum of the Chartered Institute of Securities & Investment from 2008 to 2016 and chaired the Investment Association Business & Enterprise Risk Committee from 2016 to 2019. More recently, I volunteered to join a Working Group of the Climate Financial Risk Forum, and I am still an active member of Working Groups at the Association of Foreign Banks and UK Finance, as well as a member of various networks of Risk professionals and women networks.
Reflecting on your career, what are some key milestones or achievements that you consider defining moments in your journey?
The turning point in my career was when I got promoted to the Head of Investment Risk Framework at Schroders. I only had a team of one to start with, but it was a global role with exposure to all the heads of asset classes and local business heads in Europe, the US, and APAC.
It gave me the opportunity to develop a vision of how to oversee Investment Risk in the second line.
I still remember the warm congratulations of my female colleagues, who were glad to see a woman being promoted to a high-profile role at a time when women in managerial roles were still rare.
In the dynamic field of risk management, challenges are inevitable. Can you share a significant challenge you faced and how you navigated through it?
The main challenge in risk management is to continue to learn and adapt to a rapidly changing environment. I saw what happened when the Head of Risks or CROs accepted the mandate they were given rather than the mandate they should have been given to oversee risk management effectively and provide the board with assurance against bad surprises.
I found learning about Conduct & Culture and Climate Risk & Sustainability particularly interesting.
The rapid adaptation required both at work and at home during the first COVID lockdown was also a challenge that I am particularly proud I overcame as a CRCO and working parent!
What innovative strategies or approaches do you employ in risk management to adapt to evolving threats and uncertainties?
I have always tried to learn from external events (such as SVB or Credit Suisse failures) and to integrate new techniques, such as behavior science, into my practice.
I facilitate brainstorming sessions with my team and the business on big strategic topics such as Artificial Intelligence Risk & Opportunities. I also use my networks to get ideas and tips.
How do you foster collaboration within your team and across departments to ensure a comprehensive and effective risk management framework?
My approach is communication, communication, and tone from the top.
We spend a lot of time together as Risk & Compliance team. GIB UK has adopted a hybrid work model, and we set one day in the week as our Team’s Day when we all gather in the office for collaborative work and in-person team meetings. This allows our team meetings to be more than information sharing. We brainstorm on topical subjects, share successes, practice gratitude and psychological safety, or explore cultural differences.
We also have a team onsite and fun team-building activities such as cooking, escape rooms, life-size monopoly, etc.
Cross-departmental collaboration starts when we set our annual objectives. We sit with the business to understand how we can help support them in achieving their strategic objectives. I also encourage my leadership group to create collaborative forums with the business to discuss Risk in their language. This can be regular meetings with the Investment desks when they provide a different perspective on their portfolios or one with department heads to map out how regulatory changes are going to affect their work.
As a parent, I have learned the hard way that children don’t do what they are told; they do what you do. This lesson has served me well as a leader: I strive to develop deep relationships with my colleagues on the Executive Committee and sit down regularly with all and each of them to ensure that we lead by example on collaboration.
How would you describe your leadership style, especially in the context of risk management, and how has it evolved over the years?
Thanks to the executive coaching that I have benefited from, my leadership style has evolved to be more authentic and experimental.
Authenticity encourages psychological safety, which is critical to effective risk management.
The experimental approach is about encouraging my team to be innovative and adopt new techniques even if they are not fully mature. For example, we developed simple climate risk scenarios back in 2019, even if that meant simplifying assumptions or proxies for missing data. Now that industry practices have evolved, we are enhancing our climate scenario testing approach by implementing a third-party tool.
What remains at the core of my leadership style is radical organization: I would describe myself as a process rather than market-led, even if some of the processes that I put in place are all about monitoring the markets.
When faced with critical decisions related to risk, what factors weigh most heavily in your decision-making process?
I am careful to weigh the opportunity cost with risk and favor transparency about the risks of using my veto.
However, at the end of the day, I have to make the difficult decisions that will protect our clients, my organization, and my own reputation. The test is ‘How would this decision reflect on us if it were published in the media?’
How do you incorporate emerging technologies into your risk management strategies, and what impact has this integration had on the efficiency of risk mitigation?
The use of Python and other agile technologies has had a material beneficial impact on our ability to measure, analyze, and report on Investment Risk.
So far, machine learning has been more useful for reducing false alerts in the Compliance area.
Going forward, I expect that the adoption of a large language model will change how we prepare credit risk analyses and other risk assessments.
Beyond your organization, how do you contribute to the advancement of risk management practices within the broader industry or professional community?
Besides my engagement with the Trade bodies (see question 2 above), I am a regular speaker at Risk conferences such as Risk EMEA, GRC Summit, the New Generation Operational Risk, and Op. Risk Europe and the Credit Summit. I also participated in Bloomberg panel discussions on climate & credit risk and the MyComplianceOffice webinar on Market Abuse Regulation. In 2024, I will host a Senior Female Leaders in Risk network session at GIB’s offices.
