Paul Edwards, the new chief risk officer at Darlington Building Society, tells BUSINESSiQ editor Mike Hughes what risk means for his organisation, and why this is his dream move

When someone gives an organisation their hard-earned money to look after, trust is paramount. You need to feel you have the very best people looking after your savings or your mortgage.

That search for security has been even more scrupulous in recent times as the economy has seemed to be a runaway rollercoaster hurtling up and down – but mainly down. So organisations like Darlington Building Society needed to project safety and security among the uncertainty, utilising decades of experience to look ahead for potential challenges and put solutions in place before the problem has a chance to take hold.

That’s security for your members’ money – and it is why Paul Edwards has been brought in to join the Society’s executive team.

As chief risk officer he assesses opportunities and balances the risks the organisation might face. It’s a role every financial business will have at some level, and Paul has worked in Senior Risk roles for other organisations, but this was the move he has been waiting for.

He was born in Newport, South Wales, where his early ambition was to be a rugby player but didn’t make it as a professional, and worked for the family business for a while before going travelling.

During that time, he met his future wife, who was from Newcastle, and that led to him relocating to the North East, where he joined Newcastle Building Society in 2002, then global professional services giant, EY, and Virgin Money.

In 2017, he was approached by Newcastle Building Society for the new role of head of conduct risk and compliance and then as head of enterprise risk before being targeted once again – this time to fill this vital role in Darlington Building Society.

Sitting in the Northern Echo boardroom in the centre of town, Paul tells me: ‘It’s my first executive role in the building society sector and I am here to help shape and support the rest of the executive team and the strategic direction of the business – all while preserving the financial and operational resilience of the business.

‘We’ve been around for 168 years, and I want to make sure that whatever we do going forward we continue to meet the financial needs of our members. I’ll make sure we balance that strategic appetite and objectives with appropriate risk management so that we get there in a suitably resilient way.’

A key part of that is the ability to monitor and assess both opportunities and emerging risks and ensure the Building Society has suitable and proportionate controls in place to seize the right opportunities whilst managing risks in accordance with the Society’s appetite. This approach supports the Society to pursue its strategic objectives in continuing to serve the needs of its members.

He says: ‘It is essential that we are forward-looking as an executive team because a lot of investment has gone into the building society for the past five years, which means we are in a pivotal position now as we address how we realise a return on some of that investment. So we’re looking five years ahead and trying to ensure we have the right capabilities to meet the  needs of our members and prospective members over the next five years.

‘That’s tricky in the market at the minute because it is so competitive. But therein lies the opportunity, and I believe I can use my experience to help with that.’

He is a quietly-spoken person, but there is a decisiveness and calm about him which seem like the right ingredients for the job. When he explains his route to Darlington, it is clear that each opportunity has been carefully considered to assemble the perfect career path, building experience in a range of roles within the financial services sector before deciding that this was the place he had been looking for, where he could have the most impact.

He tells me: ‘That first role from university, with Newcastle Building Society, was at an entry level. I did a number of different roles there until I found my niche in what was originally a financial crime based role – helping to detect and prevent money laundering and financial crime and managing those risks within the Society.

‘I worked my way up to manage the financial crime team and then wanted to broaden my horizons a little bit more in risk and took a regulatory compliance role initially on secondment and then permanently. By then I’d done about 12 years there and wanted to get a broader understanding of the financial services sector so I joined EY at a time when they were growing their new proposition in Newcastle.

‘I worked with a number of different clients including tier one banks and got a better understanding of how they work compared to the mutual building society sector.

‘That was a great experience, but I was keen to get back into the sector in the North East and took a role with Virgin Money, again in a financial crime operations area. I was really happy there but got approached to return to the Newcastle Building Society. They had undertaken a risk management framework review and asked if I would go back and build a new team providing oversight of the Society’s controls  to manage the risks of failing to deliver good customer outcomes, so putting members right at the heart of decisions that were made and the products and services provided.

‘That took me to four years ago, where I moved into a head of enterprise risk role, supporting the chief risk officer in delivering the risk management strategy and framework covering all aspects of financial risk and operational risk, including IT.

‘I genuinely wasn’t looking for anything different, but was approached for the Darlington executive role. I was unsure at the time and took a little bit of convincing by the person who had approached me, but that pushed me to go and meet with the executive team – and from there I was sold.

‘It was a perfect opportunity for me – good timing, but it also had to be the right organisation with an affinity to my values and objectives. Darlington Building Society did that and I could see such potential here.’

The community was another key factor. The needs of members have always been paramount, from the five per cent pledge to everyday interactions, but for Paul they meant this was a place where he and Darlington Building Society could make a difference.

‘I’m a big advocate of the mutual model because we are owned by our members, so it’s instinctively right that they are at the heart of everything we do,’ he says.

‘All decisions that we make are based around our members, so our community engagement and giving something back to them is a keystone.

‘But for me the society also needed to be sufficiently ambitious and forward-looking, not a building society that was just willing to rest on its laurels and be happy with who it’s been so far, but understands how customers needs are changing, how the market is changing and is willing to move so that it can provide for the financial needs of members in the region for generations to come.

‘It’s definitely a big step up, but it’s a great organisation to have taken that step with, smaller in scale than some I have worked for but with so much affinity with its people on both sides of the counter.

‘I can honestly say that everyone I’ve met here has been extremely welcoming, backed by a great company culture which means the executive team are really keen to keep moving the business forward.’

This is a pivotal time for the town and its Building Society, with growing opportunities, more housebuilding and the benefit of having the Government’s Darlington Economic Campus making key financial decisions just a few yards from its flagship High Row branch.

The Society is clearly choosing the right direction as it continues to adapt to the changing economic landscape. Earlier this year it was named as the Best Building Society by consumers at the British Bank Awards – and then Best Building Society Savings Provider, both awards determined entirely by customer feedback.

That followed being named Building Society of the Year at the MoneyAge Mortgage Awards, making the 19th largest UK building society officially the best in the business.

Paul’s new boss, CEO Andrew Craddock, said then: ‘For Darlington Building Society to be named as the Best Building Society among such stiff competition is an honour. However, to be named the best twice in the same year – by both industry peers and by consumers – is something else. I am absolutely thrilled to be part of such a positive organisation, filled with colleagues who put their best foot forward each and every day to deliver award-winning products and services to our members. I couldn’t be prouder. “

That’s the sort of progress, pride and recognition that Paul wants to be a part of, alongside such practical measures as the 5% pledge, a commitment to sharing five per cent of its profits to a range of good causes, with grants from £2,000 to £5,000 delivered through its own Community Impact Group, who meet every quarter.

Just talking about how his new team operates puts a smile on Paul’s face. It seems as if nothing is beyond them now, if they stick to their ethics and their priorities and keep making the right decision for their members as the country gets its wake-up call.

“It almost feels like at the moment the country is in a holding pattern waiting to see what the new government delivers and what that means for the economy, for borrowers and savers, and how the markets respond. We’ve been through some challenging times of late, but when I chatted with the chairman soon after I arrived he quite rightly pointed out that the markets are never not challenging, they’re just different challenges.

‘That means there’s never an end state, so the business will need to keep evolving because the economy will change, the markets respond and the competition in the marketplace continues to progress through innovation, new products, and its use of technology.

‘I think what Darlington has at its core, which will give it its strength, is that connection to its community which will enable it to always have a strong market presence in the region. As the business evolves that brings new opportunities, but also new risks, and part of my role is to ask how we make sure we’re identifying what the right opportunities are to pursue and recognise what risks that brings and manage those risks appropriately.

‘Where’s our appetite to pursue those strategies within? How much risk are we willing to accept? How do we run the business in accordance with that risk appetite?’

He is a dad of two young children (a 12-year-old son and daughter who is ‘ten, going on 21’), so there is a vested interest as well in building a secure future in the region with a new team that is already inspiring him.

‘Working as part of a team has always been important to me and I reflect on when we had to go into lockdown and everyone needed to work from home. I know there were real advantages that came from that period in terms of ways of working and advances in technology, but  I found that quite a difficult period.

‘I was keen to get back into the office and get that interaction with people. That mindset means I was particularly excited to meet the risk team here which I’m privileged to lead and who have already shown me that strong foundations are in place. I’ve inherited a good team with a good framework, but I’m already seeing some opportunities as to how we can come together as a stronger collaborative team – and that excites me.

‘Risk management is the vehicle that enables me to lead and develop others. In terms of style I like to promote autonomy and trust and I like to think that as a leader I will be able to promote collaboration and working collectively as a team – and I expect accountability in return.

‘Because we’re a small team there’s even more of an emphasis on us being able to work together to share the workload and be agile and flexible enough to support the business needs as they arrive. So I’m talking to the team to find out what kind of individuals we have and what they want their next two to three years to look like. Then part of my role is how do I give them the right opportunities so that they’ve got the best possible chance to fulfil their ambitions while I am knitting it all together to ensure we have the right skills and capabilities to support the wider business in continuing to deliver what our members need from us.

‘That is about seizing the right opportunities but taking them in a way that’s suitably risk controlled. We support a broad demographic of mortgage borrowers, including first-time buyers because part of our purpose is helping people in the local region get on the housing ladder.

‘That typically involves people that have a lower deposit, and a lower deposit can mean a higher risk, so part of my role is to create the opportunity to support those borrowers in a balanced way so that we have good understanding of the flow of mortgages that we’re putting on the book, the overall composition of our mortgage lending and the types of mortgages we want to offer with an informed understand of the risk profile.

‘Through the provision of suitable products and excellent and trusted service, hopefully our customers will establish a bond and a relationship with us so that we can work with them for years to come.’

As well as finding the right employer, Paul also seems to have found the right area, and while his Welsh roots are just as strong after 20 years in the North East he is settled here with his wife and young family.

‘The people are so nice, the cities are vibrant and have a great atmosphere about them and the Northumberland coast is absolutely stunning,’ he tells me.

‘Large parts of our region are thriving at the moment, while others have shown how communities come together to support each other through difficult periods. As part of our community ties, there is the opportunity for us to continue to create strategic partnerships in the region for the mutual benefit of members and communities, be that helping people to save or own their own home, employment opportunities and career pathways or through the provision of financial support or volunteering to community initiatives. What an exciting opportunity that is.’