With over 20 years’ experience working in financial services, Alex Konewko at ARQ Group has seen the full economic cycle, from boom to crisis and back – from a number of different angles. In fact, his experience both in Malta and abroad as an Executive Director, Chief Risk Officer, and Board member at one of Malta’s leading banks, just to mention a few, has taught him that adversity can often be a better teacher than success.

“You can learn more in one bad year, than in 10 good ones,” Mr Konewko asserts, reflecting on his past 20 years of experience in financial markets “When the sun is shining, everyone is busy making the proverbial hay, but when conditions start to change, it is when executive management teams, businesses, and strategic decisions are really put to the test,” Mr Konewko notes.

“For example, the ‘tsunami’ of regulatory change that was introduced in the aftermath of the 2008/9 global financial crisis, was the result of a previously exposed banking system which unfortunately had to be bailed out by governments, largely using taxpayers’ money. Thankfully, the world has learnt some very valuable lessons from that episode and improvements in the way banks manage risk has meant that from a financial stability point of view, we are in a far better place today.”  Mr Konewko further explains “sound risk management is all about learning from past misgivings, assessing future threats and setting-up contingency plans.  These principles apply to all businesses, not only banks.”

Mr Konewko joined ARQ Group recently in the role of Director, Risk Advisory, bringing with him a wealth of international expertise in financial services, risk management and regulatory compliance to the financial sector in Malta.

“It is only natural for businesses to plan for tomorrow, and while CEOs and Boards of Directors will be experts at running the show, working with trusted partners and risk professionals can only help executive management teams in building a more robust business model over the long term,” says Mr Konewko. “So, if uncertainty or adverse events kick in, being prepared and having the necessary tools in place to react quickly, such as business continuity or recovery plans, can be a huge benefit.”

This is where proper professional risk management can make a real difference, as it provides the necessary peace of mind for board members.

“We can never have full certainty of the future, but drawing from past experiences and trends, we can extrapolate possible stress scenarios based on threats that may be putting parts of a business at excessive risk,” Mr Konewko explains.

“Currently, inflation is on everyone’s minds. Though 2022 has been a relatively good come-back year for many, Russia’s invasion of Ukraine, rising interest rates, as well as several other concerted economic factors that have only compounded in the past months, have driven-up the prices of several raw materials, energy costs and costs of goods off the charts. This is creating serious uncertainty for businesses, who are often being forced to pass-on costs to their customers, they themselves also facing many of these same pressures.” Mr Konewko illustrates.

“The same could also be said of climate change and environmental risks, which is perhaps a less obvious threat, but just as serious, nevertheless. The world is experiencing increasingly extreme weather conditions, leading to a significant burden on countries’ infrastructure and energy capacity. It is only natural to ask how sustainable the situation is, and how effective alternative solutions can be,” Mr Konewko asserts. “Investing in and promoting the usage of renewable resources is clearly a big part of the solution, but obviously comes at a cost, right at a time when other cost pressures continue to grow.  Making an informed decision, with support from experts, has become even more critical.”

Risk management support from professionals outside of an institution can often provide a complete unbiased picture of the company’s situation. “Executive teams may miss the forest for the trees. ARQ Group provides specialised professional support in various areas including risk, compliance, and regulatory advice.”

Mr Konewko has experience working within a regulatory regime at the highest level, having been a Chief Risk Officer supervised by both the European Central Bank and MFSA as an approved person.  “Experience shows us how financial institutions that apply new or changing regulation proactively are better placed to take advantage of opportunities that may be created in the market, quicker and in a more efficient manner than their competition.”

He explains how even regulatory requirements can result in an opportunity for financial institutions if executed properly. “Regulatory requirements will always exist and continue to evolve. For example, the Supervisory Review and Evaluation Process (SREP) for banks and financial institutions will help to drive continual improvements in the financial system, as will new regulations, such as the Digital Operational Resilience Act (DORA). Whilst banks and financial institutions may choose to look at them as a box-ticking requirement, when regulatory activities are re-framed into a meaningful, value-additive exercises, it can benefit and positively differentiate the institution in the long run,” Mr Konewko argues.

ARQ can help regulated entities get on top of their obligations wherever necessary, drawing upon a wealth of expert knowledge. ARQ has provided financial institutions and other regulated entities of all sizes with professional advisory services, that have benefitted the companies in the long term.

“Our aim is to help directors with the changing environments they may face, whether they are regulatory, macroeconomic, or idiosyncratic challenges. Having trusted partners with the necessary experience is the best way to get advice you can truly rely on in an increasingly sophisticated, complex, and uncertain world.

“Having knowledge of the financial services industry from both a local and international perspective, we can give reassurances about our experience and qualifications.  We have the tools and expertise to help executive management teams oversee risks and ensure regulatory compliance, whilst helping them to be well-positioned to take advantage of new opportunities that changing conditions may bring.”

Mr. Konewko is looking forward with optimism at the opportunity of teaming up with ARQ Group.  “I am delighted to have joined a multi-disciplinary team with some of the most distinguished risk and compliance experts in Malta.  Within ARQ Group, we have a highly qualified and experienced leadership team. Manfred Galdes, our AML/CFT lead, needs no introduction, and neither does Denia Ellul, who manages the ARQ team that advises clients on regulatory matters”.

“Like with any business, running a successful financial institution is all about staying ahead of the game, and with our team at ARQ Group, we can help executive management teams do just that,” Mr Konewko concludes.