Risk management wasn’t in Ashwani Aggarwal’s early career plan.
“From a young age, my fascination with understanding how things work led me to mechanical engineering,” Aggarwal recalls. Now the chief risk officer of Santander US, which consists of Santander Bank NA and other U.S. businesses of Spain’s €1.8 trillion-in-assets Grupo Santander, Aggarwal earned a BS degree in Mechanical Engineering from the National Institute of Technology, Rourkela, India; and an MS in Computational Mechanics at Lamar University, Beaumont, Texas.
“My love for cars drove me to Detroit, where I had the privilege of working with top automakers and earning two patents,” he explains, and studying for an MBA at the University of Michigan brought an epiphany: “On discovering the world of finance, I realized my analytical skills and passion for challenge were ideally suited for a career in risk management.”
CRO Aggarwal: People are biggest asset.
By the time Aggarwal was appointed to his present position, he had nearly 20 years of risk leadership experience, including at GE Capital, Standard & Poor’s and GMAC Rescap. At JPMorgan Chase from 2007 to 2019, he rose to managing director and chief operating officer, model risk governance and review. He then joined Santander US as head of risk analytics and chief model risk officer, becoming CRO in 2021.
Santander is implementing a “One Santander” model globally, aligning five business units. Last October, it launched its Openbank digital platform in the U.S., where Christiana Riley, to whom Aggarwal reports, has been president and CEO since February.
“Curiosity and challenge have always fueled my career journey,” comments Aggarwal. Also a member of the Banco Santander International board, he discussed in an exchange of emails his leadership style, the strategic role of risk management, and what it takes to be effective in today’s uncertain environment.
What was it like to be in a senior risk management role during the pandemic?
Navigating through COVID was a profound experience, both personally and professionally. The unknowns were unprecedented, but our priority was the safety and well-being of our employees and their loved ones.
Clear communication was key. During the peak of the pandemic, our risk management technology and operations teams developed a comprehensive strategy for business continuity. This included setting up remote-work protocols, enhancing cybersecurity measures and providing mental health support. Amidst the volatility and uncertainty, we didn’t miss a beat.
Lessons learned?
Our people are our biggest asset. When trusted and empowered, they deliver amazing results.
In addition, COVID highlighted the need to focus on non-financial risks and the importance of the firm’s readiness to continue to operate under extraordinary circumstances. We have proven that resilience and adaptability are the cornerstones of our strength.
Describe your leadership style.
I am a servant leader who believes in empowering and developing people. Servant leadership is about putting the needs of my team first and helping them perform to their highest potential. It involves active listening, empathy and a commitment to growth.
Open communication and transparency are crucial. I encourage my team to voice their ideas, concerns and feedback, creating a culture where everyone feels heard and respected. This open dialogue helps in making informed decisions and fosters a sense of ownership and accountability among team members.
What do you look for in assembling and managing a risk team?
Finding the right talent, fostering clear communication, promoting ownership and accountability, and creating opportunities for internal growth.
What will “One Santander” accomplish?
We aim to create synergies and strategic alignment across the entire organization. By restructuring, we not only boost operational efficiency, but also emphasize the critical role of risk management in driving business success.
A streamlined risk organization will promote consistency and speed in execution, enabling the firm to better understand the holistic view of risk with a focus on interconnectedness, which is crucial in today’s integrated and digital world.
It is essential to be aware of indirect risks and blind spots, and the “One Santander” model is designed to foster that awareness.
A unified approach to risk management ensures we can maintain operational continuity and safeguard our business interests even in the face of unforeseen challenges. Resilience is at the core of this transformation.
What will the risk organization look like as a result?
While I do not anticipate any fundamental changes to our risk management framework or organizational structure, our focus is on further strengthening our risk and compliance management capabilities.
We aim to adopt the latest tools and technologies to enhance our agility and efficiency, especially in the digital world where issues can escalate rapidly. By leveraging our advanced technologies, we can improve our ability to monitor and respond to emerging risks in real time.
How does Openbank fit strategically?
The strategy of a digital bank with branches offers tremendous opportunities to reach customers nationally beyond our Northeast footprint, grow deposits and improve the bank’s cost of funds.
What steps are you taking to counter concerns about consumer confidence and the possibility of a recession?
There is uncertainty around global trade and geopolitics. These unprecedented times demand proactive risk management.
Beyond obvious risks, it’s crucial to monitor event-driven challenges triggered by other players in the ecosystem.
Our recession playbooks and crisis management protocols help us identify and manage key portfolio risks and monitor key risk indicators proactively. Clear communication, early escalation and frequent system testing are vital to ensure timely information dissemination.
What’s your take on how Santander’s significant exposure to auto lending will be affected by tariffs?
The short-term impacts are expected to be mixed.
Despite low consumer confidence, if unemployment rates remain low, consumers will likely prioritize car payments over other debts due to the necessity of their vehicles and high replacement costs. Historical data shows that consumers affected by prolonged inflation and higher debt continue to prioritize auto and mortgage payments.
The anticipated tariffs are expected to benefit recoveries in the short term due to increasing used-car prices, but we do expect demand to be challenged in the medium term due to affordability concerns.
Does the global uncertainty raise risk management’s profile?
Risk management takes the front seat during uncertain times, but preparedness with playbooks is key for seamless operationalization. Its role is to cut through the noise and draw attention of the organization to what truly matters.
While firms often become inward-focused during crises, it’s vital to identify systemic issues that can create a domino effect.
What is your best advice for finding work-life balance in a 24/7 world?
Taking care of one’s health and family should always be the top priority. A healthy body and mind are crucial for performing any job effectively.
It is also important to surround yourself with a capable team that you can trust and empower. By building a strong support system, you can delegate tasks and focus on what matters most. Prioritization is key: focus on material issues and let others take care of themselves.
L.A. Winokur is a veteran business journalist based in the San Francisco Bay area.
Topics: Enterprise, Career Development
