Episode 10: Let’s Talk FinCrime & Risk Management Across Industries

What does fighting a global disaster have to do with fighting financial crime? In this episode, we’ll talk to Roy Wilsher, former Chair of the UK National Fire Chiefs Council. Over Roy’s 40 year career, he has led disaster responses to catastrophic events such a tsunami in Japan and a major rail crash in London. Hear lessons learned from Roy’s career and how we can apply these tactics to our financial crime risk management approach.

Roy Wilsher began his career in the Fire Service in 1981 in North London.  In 1998, Roy became Senior Divisional Fire Safety Officer, responsible for 11 boroughs in North and West London. Roy served as the project lead for the restructure of the London Fire Brigade in 2001 and became Assistant Commissioner for Fire Safety in London in 2002.  From April 2013 to March 2017, he was also Chief Executive for Hertfordshire’s Police and Crime Commissioner. Roy was the first Chair of the National Fire Chiefs Council and now advises the Home Office on fire reform.

You can hear more of our conversation with Roy by visiting actimize.nice.com/podcast

To support the UK Children's Burn Trust, click here. 

Transcript

Unknown: 0:09

Welcome to Let's talk fin crime, the show where we explain not only what compliance and financial crime are, but most importantly, what it means for you and how it affects your daily life. I'm your host, Dave Ackerman. I'm a lawyer, former Chief Compliance Officer, and financial regulation expert for nice Active Minds based in New York City. We bring you conversations with some of the most interesting people we can find, all designed to help you understand what's happening in the financial world. So my question this week is, what does fighting a global disaster have to do with fighting financial crime? You're probably thinking, nothing. In fact, you might be thinking, Oh, Dave, this time you have gone too far. But I want you to picture a scenario. You're an entry level compliance analyst at a large financial institution. It seems like a typical day when based on a routine audit, you find something odd. The more you read, the more you realize this could be a catastrophe. Your heart races you breathe heavy, you start to feel tingling all over. What do you do? The stress you feel also known as the fight flight or freeze response, can be completely overwhelming, and cause you to make very irrational decisions. This is a very real scenario, but one very few people are prepared for. That's why, in this episode of Let's talk fin crime, we're speaking with a man who literally fights global disasters. We're going to see how he approaches the situations that would completely overwhelm the untrained eye have true admiration for our guests. Roy Wilshere is an elite firefighter in the UK with a distinguished 40 plus year career. As the former chair of the National Fire Chiefs Council, and current advisor to the UK government on fire reform. ROI provides support guidance and training to fire and rescue services internationally. Roy led the UK rescue response for the Japan earthquake and tsunami in 2011. He was the lead national strategic advisor for fire and rescue issues during the 2012 Olympic Games. And he fought the largest peacetime fire at Buncefield oil terminal in 2005. Not to mention the man has enough medals and awards to make his uniform look like a chandelier. Roy, it is truly an honor to have you with us. Thank you for being here. Thank you, David. So it's a real honor to be here too. I think you're right. Your your listeners might wonder what's in crime has to do with emergency response. But I think we can learn from all sectors. And I'm always learning from my career. And hopefully we can even add a little bit of knowledge to people learning that. Right? Absolutely. And dealing with emergency situations, global disasters, people are going to have the same kind of physical responses to that. So I can't imagine someone who's simply born knowing how to handle that. Can you start us off with maybe some a notable memory or experience that you had and how it shaped your career? I think certainly I can. And I think what happens in everyone's careers is you learn from every type of incident and every experience. People often ask what experiences and how you gain it. And I think it's not how often you have an experience is how you've learned from each one of those. So very early in my career, when I was first in charge of fire engine, actually, we attended an incident it was only a minor road traffic accident. Someone was trapped. And I remember thinking, What do I do? What messages do I send the control has already organized. And it was the experienced firefighters around me that supported me and saw me prudent that very first incident so I learned a lot that teamwork there and listening to others. And another topic remember when I first started going to larger fires, not so much on the fire trucks as you might call them in the US but in my own car attending like a battalion chief in America and getting very excited, very heads up getting dressed very quickly what to get, and a more senior officer just walked up to me said just just calm down a little an officer never runs if you you go onto the back of the control unit in that sort of atmosphere that state, you're supposed to be in charge what other people think of you. So I think again, learning from that is to is to take a step back. Take it all in, see what you have to deal with and then Step forward. See, that's an interesting perspective. Because I can tell you that in in compliance, as a former Chief Compliance Officer, I was always very aware of my demeanor. And I use humor a lot. But when we were in serious situations, I was very, very cognizant of the fact that if I looked panicked, people were going to panic. So I, you know, I may have been a duck duck on the pond where my feet were kicking really fast underneath the water. But on the surface, everything looked calm, cool and collected. Even if I had absolutely no idea what I was doing. One thing you know, over the course of your truly incredible career, one thing that I had noticed is you, you oversaw the crisis response to a major train crash at Paddington Station. So one of the things that I like to advise younger compliance officers is that you're going to experience these new situations and they're going to seem catastrophic and whatnot. And there is a process that you can follow. So can you explain when you saw something like that a major train crash at a major UK train station? What was the scene when you arrived? How did that what were the first steps that you you engaged in? But I think to set the scene, and if people want to look up the incident is very much on the internet. If I ever be called let Ladbroke Grove or Paddington rail crash, and I was supposed to be off that day went into work, I got a phone call from our dispatch control that said, Are you ready to attend an incident? And responded I was I said, Can we have a train crash for you just outside of Paddington railway station? Okay, we're not we're not sure what it is. And so so all the way there I was just trying to listen to the information trying to listen to messages. When I left my office, there was eight fire engines eight fire trucks and personnel attending at a time I arrived there was 12 in attendance plus offers specialist vehicles. And I remember go down to control unit. And the control unit is where the central control at the incident is was was chaos. So Roy, I'm curious based on what you've been talking about in terms of that perspective, change that firsthand knowledge of the scene of the situation of all that information coming in? Have you ever changed tactics based on a change in perspective? Or just you you went to go see the situation you said you know, if you tried to describe your your flatter your house in the UK, and we're going to see it it's a very different different picture than what I was originally envisioning. So that ever happened to you before and an example of that yes, it has I just before I move on to the carry on you're saying about cod past the present and the future perspective the futures really important as well so if you think yourself what's going to happen over the next few hours 12 hours 24 hours if the incidence going that long have I got enough resources do I need to change the fire trucks I have because people get tired so looking forward and anticipating what might happen is all really useful but in that that change of perspective I can remember what a large fire in in a in a high strip Kentish town for anyone who knows lambda probably bolts fairly patch part of London, we was fighting a fire in a in a builders merchants and I remember talking to someone getting a perspective and someone was describing these these tall cylinders properly in color, probably purple. And the more he described the cylinders and the more I thought he was talking about the settling. And if anyone knows acetylene is a very volatile gas that is used for burning torch burning, cutting metal things. Certainly in torches, essentially it's to to cut giant metal boats. That's good. That's correct. And because it's so volatile, these things can explode and go hundreds of yards meters. And the person from the from the store was describing 40 or 50 of these cylinders. And so I was immediately thinking I need a 400 meter exclusion zone. I need to get everyone in that in space. Solutions only evacuated, I need to withdraw all the firefighters from fighting fire. This, this was going to close down North London and New York and I have driven in New York Actually, I've driven winter into Manhattan. So very, very similar traffic to closing down. You'd be like closing down Manhattan the ad imagine the chaos. And so I thought this just doesn't feel right. It doesn't feel like this is the place that would have 40 to 50 settling. So I kept asking questions, or kept gathering information or kept or even got it up on on their internet on the tracker. So this is this is what I'm thinking about these two copper purpley cylinders? And the chips are no, no, no. And he looked through, and what it turned out to be a long story short, it turned out to be hot water heaters, copper canisters for heating books or for central heating systems in the UK, which of course are completely invert. And if you go back to firefighting, so that complete change of perspective, I went from one minute 400 meter evacuate everyone in the 400 meter circle closed down most of North London to now just go back and fight the fire the way we were fighting the fire. So complete change of perspective. But again, that is a fascinating point, because it's the chaos that's surrounding you and trying to deal with all these different areas of information that are flowing in. It is it seems like it is critical to ensure that the data that you're getting that you're basing your conclusions on is accurate or as accurate as possible. I mean, because it sounds to me, like if it was acetylene, now all of a sudden, you're going from trying to save the building to try to save as many lives as you can. At that point. It's now it's it's triage in terms of just how far can we get these people back before this thing goes, as opposed to a hot water heater? Which actually might actually help? So the I mean, you must have Brett breath, is the head a sigh of relief? Once you kind of really verified what this what this gentleman was talking about and realize that the situation that could have been catastrophic, probably wasn't actually that still difficult, but not as bad is? Absolutely, I mean, in your line of work, we can we can go back to the data or the deployment processes, but having clean data as far as possible, absolutely important. For the things we teach out out more junior officers is be careful with confirmation bias. If people do this on the on social media a lot, they tend to follow people on Twitter that confirm their own views, though, you know, beware of confirmation bias that you're looking for clues and cues that confirm what you're thinking. So be very careful with that yet, try to triangulate your information. So have you got one more than one source of information that leads you to believe what you believe. And then you think about decision controls. If you're trying to achieve something if I make this particular decision, just think well that decision achieve or time trying to achieve we call it decision control. Just take a few seconds a few minutes to think about the decisions you're going to make. And the last thing I would add to that is when we give orders to people in the incident ground. We do something we call confirm understanding. confirm that the person you're given an order to understands the order you're given. Because if they've misheard or misinterpreted or they're using their own confirmation bias, you might not achieve what your decisions are trying to achieve. Though, confirm overspending, beware of confirmation bias and think about decision controls. That sounds like a perfect place for us to take a quick commercial break, but stick around because we are definitely going to dive deeper into those topics that Roy just mentioned. Are you part of a financial institutions interested in sophisticated AI powerful analytics and intelligent data? Catch up with nice atomize engage live on demand to hear from industry experts. unexciting keynotes as we work together to fight financial crime. Visit nice act demise.com slash engaged to watch for free. Welcome back room Oh sure, is an elite firefighter in the UK with a 40 plus year career. And as the former chair of the National Fire Chiefs Council in the UK and current advisor to the UK government on fire reform, He is an expert in how to deal with disaster situations. And we're talking about tactics that even you can employ to ensure that you're handling a crisis situation in the most effective way possible, trying to glean different insights from his years of experience with catastrophe. And try to translate that into how do we deal with that in the financial services community, whether it's compliance or even just daily operation? Right before the break, we were talking about two really interesting concepts, especially to me from, you know, being from an operations background, decision control, and confirm understanding and ROI, the cool thing of there's a, there's a huge nexus between what you do and what I do, right, and the idea that experience is the best teacher, but experience only helps you kind of sift through the data, right? You're going to have data coming in from all these different sources. And not all of it's going to be either accurate or useful, or even determinative of what your next steps would be. So in, I want to come back to that, that concept that you had about confirmation bias. Can you give me a an example? Or how we can train ourselves? Maybe not just in a crisis situation, but learning from your experience in that? How do you take that data? Or how do you look for evidence? And and what are ways that you can minimize that confirmation bias that you were talking about? I think it's it's approaching things, poaching incidents with an open mind, I think you, you will rely on your experience and your training and what you have seen before. But don't always think that's what what he's going to be in front of you. I think I've probably linked this to another fire that I attended. Many years ago now. One where I forgot last to breathe operators through. It was the fire is in front of us he at the Football Association headquarters, they people run football or soccer, or American listeners is the and we were searching for this fire. We thought we knew where it should be. And we just find it. So in terms of confirmation bias for what it's found to spread along the corridors and probably into the roof, or it might be going up the staircase, but we still couldn't find it. What we realized afterwards, and we're digging in, there were voids between the floor and ceiling below, there was three foot meter voids, and the fire had been traveling along those voids. So I think we needed to gather evidence to find that and stop all the Jews in front of us confer any day to me, confirming my bias. I thought I knew the way the fire should be spreading that building. But it was spreading in a different way. So needed more evidence, we need to cleanse the data. We needed more communications, or evidence coming back to us so we could actually find and fight that fire. What ultimately was it that allowed you to have that aha moment and realize something was missing? Right? You there was a critical piece of information that you didn't have at that time. That was that just something didn't feel right. They didn't feel right because we couldn't find the flames. We couldn't we couldn't find. Yeah, we could. We could feel the heat. We could see the smoke but we couldn't find the flames. And it is when we use that piece of equipment a thermal imaging camera something that shows the heat that we used it properly inside up. You know and even then we It was so that these floorboards look too hot. They can't, they can't possibly be that hot. So it wasn't until we started to lift a couple of floorboards that we really found where the fire was. That's incredible. And, again, that is directly transferable to the finance industry. One of the biggest issues that we have, especially with data cleansing, and confirmation bias is the wealth of information. A lot of times we have so much information, that it's almost difficult for a human being to process all of that and to get that clear picture. And the reason I'm harping on this idea of confirmation bias is a lot of people in my industry, myself included at points in my career, I think I know what something's going to go, and instead of me letting the data Take me there, or let me rephrase that, instead of looking at the data and letting the data Tell me the story. I'm looking for data that confirms the story that's already in my head. And you know, as with your situation, ultimately, it took a piece of technology that showed you something different, it gave you an additional piece of information, given data that was already there, you knew the floorboards were hot, you just it just it didn't feel right. Um, we do the exact same thing. There's a there's a phrase, big data does not necessarily mean good data. And with, especially with the type of organizations that I deal with on a daily basis, you're talking about hundreds of 1000s, sometimes millions of transactions. And it's more information than a one human being can process. So part of what we try to do is help people figure out what is the tool that you need for the job, right? No one on the planet goes out and buys a tool and says, Okay, what can I fix with that, they have a problem. And then they go and look for the proper tool to solve that problem. So I just I find it really illustrative of how, how your situation was so transferable where you, you knew the fire was spreading, you felt the heat, you saw the smoke, but you didn't see the actual flame. That literally happens every time when you look at a fraud investigation. When you look at market manipulation in the industry, oftentimes All I've got is smoke, or all I have is is a really hot floorboard, what I don't have is the fire piece. And that's where it kind of it's it takes a little bit of that intuition, a little bit of a technology to kind of put that picture together. And this idea of confirmation bias, I would imagine as you're talking to new crisis fighters, or you're helping train up the next generation. The Is it hard for them without having your background having all that experience to to formulate the picture is it hard to explain to them how to look for evidence and not to rely on confirmation bias or even be aware of it? It is and it's even harder today. Fortunately, there are fewer fires in in UK, we have 50% less fires now than we did 20 years ago. But memorable. The importance of training people realistic training, realistic simulation, we're starting to use virtual reality more and more. So people get into that. They learn from what they see with their eyes, and they learn to recognize the cues and the clues of what's happening so they can make the correct decision. Though, it's it's interesting with with the politicians a sidewalk This is purifiers who need fewer firefighters, which we disagree with. But we say we need to use our time to do more training purifiers. These means we need to train more that people aren't getting beyond the job experience that I did in the early 80s when I was a firefighter training becomes even more important. And that makes perfect sense because it's it the the experience that you've developed over time becomes invaluable, because you're then able to almost process all those data points and realize that's not right. What this man is describing is not acetylene or, you know, it fires don't move that way. We're missing something. And, you know, one of the things that I so we also deal with an analogous situation in finance, where there's a constant struggle. compliance officers are Often, the front line, they're the people who are monitoring all the trading activity to make sure that people don't don't do dumb things with your money with your pension. And I find that as a very noble pursuit, we are trying to make sure that the marketplace is as fair as possible for everyone to participate in. The problem with that is, compliance is often viewed as a cost center. So as as you said, as fires go down as market manipulation and things, our ability to fight, it becomes more robust. The instant reaction is, oh, I guess we don't need more people. And and when in reality, I think it's better to change that perception and change that conversation, to why don't we just empower the people that we have better than we did before? Let's, you know, those fires that that still exist today, despite all the safety concerns that we've put into place, and all the different regulations that we put into place, they're still happening. So does that mean that that we can never fix it? We can never fight the problem? No, it just means we need to change our tactic. You know, I'd love your perspective on this. Given that you, you know, you are so so involved with fire reform, something that I often tell people is there's a regular there's a reason regulations exist. So in our world, it's, you know, this regulation exists because somebody was able to corner the market on something or somebody was able to swindle 1000s of people out of their retirement or the pension. You know, in your world, I would imagine that, you know, there's a reason why there's a building code. And it's not just so that people have to build things in a standardized format. It's because you don't see the firefighter that passed away, because he couldn't get out because the window wasn't big enough, or you don't see the police officer that couldn't save that family, because, you know, the door wasn't properly affixed to the window. So, you know, I'm kind of curious, in your perspective, is what type of regulatory changed Can you foresee in the months or years ahead or that you would like to see, that would be a result of a crisis you manage or something that you've experienced over your career. But I'd like to take you on to two places really, one's very personal, because it involves the loss of a firefighter, but also in more general terms, but we have a saying here in the UK, you've probably got something very similar because they evolved or legislation. So the horse has already bolted, that a crisis or the incident has already happened. And then we bring in legislation to close that stable door. And we know, we'd be a couple of steps behind. So we're doing the same following the Grenfell tower fire which was a fire in a high rise apartment block here in the UK, where 32 people eventually died. It's quite a major again, people can look up online and there's all sorts of new legislation coming in five safety around external wall coverings and a new building safety regulator. And a lot of it came from people not complying with existing regulations, but also the existing regulations sometimes not being as clear as they can be. But there's one one it's almost a minor it is legislation but one that I hope this is about to be listeners why I lost a firefighter when I was chief of half cheer Fire Rescue Service back in 2005. But in fact, the last two five I did the same fire but one of them was escaping the fiber got tangled in cables. So satellite TV cables, those cables couldn't eat. What had happened is they've been fixed with plastic fittings which have melted, that a drop from the ceiling. So a better stable door legislation, what you will afterwards in the UK now you cannot fix those cables of anything apart from metal screwed metal clippings now, that won't melt or give way. And so the danger of firefighters and in danger, members of public charges. With I suppose It'd be great if we all had the foresight to bring regulation that foresaw the next crisis, but hopefully, regulations change and regulation make people differently terms of fire safety bolts and make their finances safer. Oh, absolutely. And one of the reasons why I, I can get somewhat evangelical when it comes to my job. And when I was csio. I had, I had the pleasure of dealing with both retail and wholesale ends of the business by on the sell side. And what I would tell some of the retail guys was understand something, you know, I'm here to be a resource for you to help you help your clients in the most effective way possible. But just realize something I treat every one of these clients like it's my mother, and Heaven help you if you mess with my mother's retirement, because that's the rest of her life. You know, it may not necessarily be the type of instantaneous life altering situation that you've dealt with all the past. And yet, when you're dealing with people's finances, when you're dealing with their retirement when you're dealing with their livelihood, that has just as much impact. So I think it's a point well taken. Please understand that as we have these conversations, and as we talk about the what these regulations are designed to do realize behind every single one of them is a story. And those stories oftentimes are not particularly nice. So the reason we exist in any crisis management, whether it be fire, finance or anything in between. Just understand that no one ever wakes up one day and says oh, I feel like creating a new a new rule for someone to follow. There's definitely a reason behind it. And sometimes understanding that reason is a good, good way to ground you into realizing we need to comply with to the best of our ability. So Roy will show as a highly decorated firefighter in the UK with a distinguished 40 plus year career as the former fire the former chair of the National Fire chief's Council and current advisor to the UK Government of fire reform. Roy has supported guided trained Fire and Rescue Services internationally. And I genuinely hope you do it for another 40 years, sir. Roy normally this point the show this is where I ask how people can get in touch with you. But in this episode, we have something a little bit different. As I understand that you're the trustee of a charity, as if your place in the afterlife wasn't assured Enough already. So you're really starting to make the rest of us look bad. Um, can you please tell us the name of the charity or trustee with and where people can go to for more information or to donate. And thank you for the opportunity if they say it's quite a small charity and UK animal trust is called the children's burns trust. And it tries to prevent burns in schools, not just from fire, but many more children in the UK get burned from hot drinks, tea, coffee, those sorts of things and pulling them on themselves. And it's scalded, even hot bath water, though we try that prevention, but we also support those children, their families when they're in recovery. And we put them in touch with other families going through the same trauma, so they can support each other. So again, the I think there will be a link on our website. If people want to learn more about that it's certainly on. You can you can google the children's burns trust in the UK, and learn all about it. But say it's a charity that's very dear to my heart. And we do our best to prevent young children being harmed in that way. That's incredible. And Roy, you probably don't know this, but those who are fans of the show, I've mentioned a number of times that my family is a first responder family. We have police, firefighters, even my brother was a COVID tracer trying to help people connect with services who were either exposed. So over this crisis. So what I would like to do is from my family, we are going to be donating $250 to your charity to the children's burn trust. And then when we promote this episode, we will make sure that that link is available. So I hope this just is a minimal way for me to show my true respect and admiration for you and your incredible career. So please, thank you again. I hope you enjoy being here and I hope you enjoyed the conversation. Do you have any parting last words for those listening, who may be faced with a crisis in some time in their lives? Well, first of all, I'd like to say thank you very much for your generous donation. That's fantastic. And thank you I have enjoyed the conversation. I think perhaps I'll leave with one little piece of advice that I give all junior officers underneath. Please never be afraid to ask. No one knows everything. And if you try and bluff your way through, that's the worst thing to never be afraid to art. Fantastic advice. I tend to give the same to young lawyers saying like look, you are going to make a mistake. And usually it's when you try to cover the mistake up that it's snowballs. If you come forward, learn from those before you. Those are typically the best ways to handle those situations. So, Roy, thanks again for being here. Thank you for listening. Please don't forget to subscribe. If you have an idea for a show or you're interested in being a guest, we'd love to hear from you. So drop us a line at podcast at nice, atomized calm. And don't forget we've bonus content for every episode available at active minds.nice.com forward slash podcast. Roy. I want to thank you again for being with us and we will see you all on the next episode of Let's talk fin crime.