Globally, the very complex structures risk managers rely on — systems and technology, culture, frameworks for accountability — are being transformed from within, said Mihaela Nistor, chief risk officer and head of the Risk Group at the New York Federal Reserve.
“We are facing a new structural risk that emerges from how we design, build, and manage our institutions. It’s the potential misalignment inside the system itself that we need to manage for,” she said.
Some of the misalignments she noted are:
- risk functions that operate in review cycles, but technologies and business processes that operate in real time
- governance models that rely on escalation, but cultural norms that avoid friction
- accountability frameworks that codify linear decision-making, but workflows that are distributed across organizational layers and business functions
Structural risk is harder to see because it doesn’t come from outside—it comes from within the design of the system itself. And it’s particularly dangerous because it doesn’t trigger alarms. Rather, it prevents decisive action because no one can quite point to where the fault line is, even when they sense something is off, she said.