Ahead of joining us at ComRisk 2019, Kim Benni, Global Head of Risk and Trading Technologies at Alvean, gave us his top 3 areas that risk professionals overlook.
A conversation with Kim Benni
The commodity trading sector is under a lot if scrutiny from regulators and auditors. What are in your opinion the 3 areas that are being overlooked by risk professionals?
- The political risk, which I had the pleasure to share a few concepts about during ComRisk 2016, is in my view still quite underappreciated and brings potential fracture lines as well as great opportunities to commodity trade. A higher occurrence of disruptive events such as the US-China trade war, Brexit, IMO-2020, currency devaluations and others is reversion to the pre-1990’s instabilities.
- The entry of new well capitalized companies in commodity, who works with limited private data but vastly superior analytics skills. The bulk of commodity business often have access to tons of private data but lack the ability to monetize them.
- Finally, I believe that an entire generation of managers never experienced a high interest rate environment, and as such some commercial decisions, and their consequences in cash flow booking, are made without properly recognizing the cost of money.
You’ll speak on trade sanctions at the next ComRisk gathering. Traceability being one of the challenges in this area, could you give us a sneak peak at the tools that can ease the hassle around documenting all movements in commodity trading?
Having an end-to-end CTRM system goes a long way in fixing traceability and sanctions issues. The trick is to acquire the right information early enough to extract value from it through analytics and automated screening.
You’ve been joining us for a few years now. What makes you come back?
Mainly the chance to join an assembly of my peers as well as the large spectrum of industry topics which is debated over the conference.