How KPMG's FRM practice helps clients adapt to changing financial risk

With regulatory changes coming thick and fast for the financial services sector, KPMG’s Financial Risk Management (FRM) practice provides a crucial service in helping the industry develop strategies to adapt regarding compliance, sustainability, Brexit, and many other issues. Helen Stijnen and Hessel van Straalen spoke to Consultancy.eu on how the firm supports the response to regulatory developments.

The FRM practice offers high-quality services in the field of audit and advisory. As custodians of economic activity, the firm’s auditors provide assurance services to clients, while its consultants provide expertise to help clients prepare for tomorrow’s economy. With the financial sector having to adapt to an ever-expanding regulatory landscape, this work is crucial to many firms being able to meet the needs of regulators and their customers.

Helen Stijnen joined the Dutch Financial Risk Management wing of the Big Four firm in 2015. Bringing almost 20 years of actuarial experience to the company, she initially arrived as a Director, before being promoted to Partner, leading the division three years later.

Explaining the role of the FRM practice, she said, “While we mostly work with financial institutions, we also serve some corporates. The regulatory angle is the biggest driver of the work we do.”

Sustainability

Hessel van Straalen, a senior consultant, highlighted how sustainability is becoming a key cornerstone of the work their team participates in. In particular, KPMG is working with clients to help them transform the way they handle sustainability risk – which previously has been siloed in organisations.

“Sustainability is becoming a very urgent business,” Van Straalen stated. “We [for example] help two large banks in the Netherlands on their regulatory driven sustainability journey. A key change is that the topic is no longer dealt with by a separate group within the bank working on sustainability, now regulators expect that you integrate this throughout the entire value-chain of the business.”

“That is something we advise on; from the setup through to execution.” Meanwhile, “this also impacts all risk management departments at our clients” added Stijnen, meaning that KPMG’s experts down the value chain support with the implementation of much-needed new ways of working.

While regulatory-induced sustainability shifts are most common with banks at present, other industries will be set to experience it soon. Drawing on the fact that KPMG is “at the forefront” of the changes in the banking sector, Stijnen explained that KPMG is already bracing clients for the coming transition.

“It’s now really urgent for banks, but for instance less so in insurance. We do see it coming there though, of course – so what we are doing at KPMG is to share and transfer our best practices from one industry to the other. Our banking experts for example recently hosted a virtual workshop with some of our insurance to walk through our thought leadership on the topic.”

Knowledge sharing

KPMG does not only share information between its team in the Netherlands. According to Stijnen, the firm’s global reach means there is a massive “movement” of information between staff around the world.

She explained, “We have a true global network. On any topic, whether it is sustainability, digitisation or risk solutions, we have global initiatives which add insights. At the same time, there is always room for individuals within a team to take initiative and say ‘I want to contribute to this,’ or even to work for a few months on a project abroad, giving us a huge diversity of knowledge.”

In his work, Van Straalen has experienced such cross-border knowledge dissemination first-hand. He recalled, “We do a lot of international work, with our UK colleagues for example – especially around Brexit. We have helped a lot of British financial services clients who had licenses to operate in the UK to apply for post-Brexit licenses in mainland Europe.”

Steep learning curve

Asked about what he enjoys most at working in KPMG’s FRM practice, Van Straalen pointed at the steep learning curve that can kick-start a career. “There is a lot of C-level exposure from early on. What I am working on at the moment for example goes straight to the C-level of a major bank.”

While the work and client are confidential, Stijnen did add that it involves “helping a working group on climate risk shape their vision on the matter.” Van Straalen: “the task can be a bit frightening, but it is exciting too – and I always know that there is a team behind me I can fall back on. I can call Helen, discuss how to solve something, if she could join the next meeting, and so on.”

This learning curve is reinforced through an internal learning cycle. Van Straalen: “We have regular FRM meetings, as well as more focused sessions where we share knowledge gained in ongoing client engagements, and also receive updates about industry developments.”

Stijnen added that this two-sided approach is an integral part of KPMG’s development approach. “We spend a fair amount of time on internal meetings. Beyond learning, they also have the intention of staying connected to your team,” she said, to quickly add “and that is more relevant than ever now that we are working remotely.”

Culture

Having reflected on the high-stakes interactions and steep learning curve within FRM, Van Straalen turned to another key aspect of work: the internal culture. “It might seem from the outside that KPMG is very formal, but actually inside it is quite non-hierarchical,” he said.

“Juniors can connect easily with experienced colleagues, partners, and even clients on C-level. That makes it an attractive place for people to begin their careers; and we’re a very young team – the average age for our team is around 30 – giving us a high energy atmosphere, and making work a lot of fun.”

In line with KPMG’s corporate goals, the FRM practice strives for a “diverse and inclusive culture and working environment where everyone feels involved and valued,” concluded Stijnen.

More information? Interested in joining KPMG’s Financial Risk Management (FRM) practice? The service line currently has several open positions for junior, medior and senior roles.