Question: How can we better anticipate risk?
Don Tapscott: I have a modest proposal that we need to rethink risk management and we need to apply the principle of “Wikinomics,” my book, to risk.
Number one is, we should be sharing intellectual property. Risk models, algorithms and data should be placed in the Commons. We should have a human genone of risk management or a Linux of risk management.
“Oh! We will never do that, our risk models are a source of propriety competitive advantage,” people say to me. Well, hello! Did anyone notice they not only did not confer competitive advantage, collectively they led to the downfall of the entire industry and created a massive global crisis.
The idea is that you share some of your intellectual property and a rising tide that lifts us boats, and then you compete on a higher level, sharing. We need to have transparency based on risk management. We need to have peering; the financial services industry and its leaders should get together and acts as peers, rather than being the recipients or victims of government legislation. Better grab the bull by the horn and reinvent their industry around these principles, transform risk management and do the right thing. Present a new modus operandi, a new operating model for risk and for financial services.
Recorded on: June 9, 2009.