SCALE APPROPRIATELY
RISK MANAGEMENT
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BCG ’ S ‘ 10 PRINCIPLES OF RISK MANAGEMENT ’
1 . Risk management should start with senior executives
2 . Risk management is a collaborative process
3 . Avoid overreliance on complex metrics or models
4 . Strategy and risk management should be interchangeable
5 . Far from just being corporate policy , risk management should be crystallised in a company ’ s culture
6 . Information should be freely available to facilitate a fast response
7 . Active discussion is better than reliance on ‘ reports ’
8 . Rather than seeking an end goal , risk management should be viewed as a never-ending journey requiring constant development
9 . It is possible to prepare for unknown risk factors
10 . Plan for the worst but hope for the best – i . e . don ’ t be entirely dissuaded from an investment specifically because there exists some element of risk
SCALE APPROPRIATELY
In July 2019 , ‘ impact investment ’ startup Swell Investing officially announced that it was closing after just two years in operation . The company ’ s official statement declared that it had failed to “ achieve the scale needed to sustain operations in the current market .” Investors were subsequently given until mid-August 2019 to withdraw their funds . According to CBInsights , VC Pacific Life Insurance had already invested $ 30mn into Swell prior to its closure . Given the company ’ s own admission that scaling issues were at the heart of its problems , VC firms should consider the principle value drivers of their investment , such as products addressing a common FSI ( financial service institution ) tech problem , services of relevance to changing market conditions , or the ability to provide an exceptional customer service experience .
Recognising opportunities for collaboration and developing partnership networks within FinTech can redress the balance for those experiencing issues with scaling . PwC ’ s 2017 Global FinTech report , which it revisited in 2019 , highlighted that symbiotic collaboration within different elements of
OCTOBER 2020