Interview No. 10: Dr. Enrico Piotto is Chief Risk Officer and member of the Executive Committee, EFG International. He has just joined the board of directors at Swiss Risk Association and brings in an international background in the financial services industry and Wealth Management. He has profound knowledge in credit risk and will help to create this chapter within the SRA. His motivation: give something back to the Swiss Risk Association community, help defining standards and leading methods and sharing experience with others. He wants to promote Switzerland as the leading center for risk management.

โ“๐–๐ก๐ฒ ๐ข๐ฌ ๐ซ๐ข๐ฌ๐ค ๐ฆ๐š๐ง๐š๐ ๐ž๐ฆ๐ž๐ง๐ญ ๐ข๐ฆ๐ฉ๐จ๐ซ๐ญ๐š๐ง๐ญ โ€“ ๐ข๐ง ๐›๐ฎ๐ฌ๐ข๐ง๐ž๐ฌ๐ฌ ๐š๐ง๐ ๐ข๐ง ๐๐š๐ข๐ฅ๐ฒ ๐ฅ๐ข๐Ÿ๐ž?
Risk is a part of everything we do in business and in our private lives. Risk cannot be avoided, and every organization, as well as every private individual, should define and clearly stipulate their own risk appetite. Understanding the risk and judging whether it is within or outside the risk appetite should be one of the drivers of every decision.

โ“๐ˆ๐ง ๐›๐ฎ๐ฌ๐ข๐ง๐ž๐ฌ๐ฌ โ€“ ๐–๐ก๐š๐ญ ๐ก๐š๐ฏ๐ž ๐ฒ๐จ๐ฎ ๐ฅ๐ž๐š๐ซ๐ง๐ญ ๐จ๐ง ๐ซ๐ข๐ฌ๐ค ๐ฆ๐š๐ง๐š๐ ๐ž๐ฆ๐ž๐ง๐ญ ๐ญ๐ก๐š๐ญ ๐ฌ๐ก๐จ๐ฎ๐ฅ๐ ๐›๐ž ๐ฌ๐ก๐š๐ซ๐ž๐?
Because risk cannot be avoided, it should be compensated for. Organizations and individuals should define their minimum return on risk. In every strategy:
a) understanding the risk,
b) judging whether it is within or outside the risk appetite,
c) assessing if the risk return is above the minimum threshold
are the pillars of sound decision-making. Finally, in every undertaken risk, always plan for the way-out scenario. Hope is not a strategyโ€ฆ

โ“ ๐ˆ๐ง ๐ฉ๐ซ๐ข๐ฏ๐š๐ญ๐ž – ๐–๐ก๐š๐ญ ๐ข๐ฌ ๐ญ๐ก๐ž ๐›๐ข๐ ๐ ๐ž๐ฌ๐ญ ๐ฉ๐ž๐ซ๐ฌ๐จ๐ง๐š๐ฅ ๐ซ๐ข๐ฌ๐ค ๐ฒ๐จ๐ฎ’๐ฏ๐ž ๐ž๐ฏ๐ž๐ซ ๐ญ๐š๐ค๐ž๐ง?
When I was a teenager, I wanted to try everything, explore everywhere, and visit every place. Sometimes, I found myself in dangerous situations. Fortunately, I always managed to come back safely, but looking back, I realized that I had been underestimating the risks. I used to say, “This can’t happen, and if it does, it won’t happen to me.” I learned to understand the risks, take ownership of them, and exert control.

โ“๐–๐ก๐š๐ญ ๐š๐๐ฏ๐ข๐œ๐ž ๐ฐ๐จ๐ฎ๐ฅ๐ ๐ฒ๐จ๐ฎ ๐ ๐ข๐ฏ๐ž ๐ฒ๐จ๐ฎ๐ง๐  ๐ฉ๐ซ๐จ๐Ÿ๐ž๐ฌ๐ฌ๐ข๐จ๐ง๐š๐ฅ๐ฌ ๐ข๐ง ๐ซ๐ž๐ ๐š๐ซ๐๐ฌ ๐ญ๐จ ๐ซ๐ข๐ฌ๐ค?
The most significant lesson I learned from a professional skipper is that we all have two hearts: one heart wants to push the boat and go faster and faster; the second heart knows the boat can break and wants to keep it within a safety buffer from the breaking point. Risk management involves finding the balance between these two hearts. Whatever race we are running, we all like to win. However, to be the first to arrive, you must ensure first you arrive.

โ“๐’๐ฐ๐ข๐ฌ๐ฌ ๐‘๐ข๐ฌ๐ค ๐€๐ฌ๐ฌ๐จ๐œ๐ข๐š๐ญ๐ข๐จ๐ง โ€“ ๐ฐ๐ก๐ฒ ๐š๐ซ๐ž ๐ฒ๐จ๐ฎ ๐ฉ๐š๐ซ๐ญ ๐จ๐Ÿ ๐ญ๐ก๐ž ๐ง๐ž๐ญ๐ฐ๐จ๐ซ๐ค ๐š๐ง๐ ๐ฐ๐ก๐š๐ญ ๐ข๐ฌ ๐ฒ๐จ๐ฎ๐ซ ๐ฉ๐ž๐ซ๐ฌ๐จ๐ง๐š๐ฅ ๐ฏ๐š๐ฅ๐ฎ๐ž?
Risk management in the financial industry is a combination of rigorous methods as well as art and experience. SRA is instrumental in both:
a) In collaboration with universities, SRA defines the best standards and leading methods.
b) By convening long-term serving professionals, SRA provides a forum for sharing experience.

With two and a half decades in the industry, my commitment to SRA is to bring both aspects and promote Switzerland as the leading center for risk management.