Joe Di Rollo: ‘we’re providing peace of mind’ (pic: Terry Murden)
Interview: Joe Di Rollo, risk manager
The collapse of Northern Rock in 2007 was a memorable moment for Joe Di Rollo, not only because it signalled the beginning of the financial meltdown that would spread around the world; it also marked a step-change in the fortunes of his small Edinburgh company that had seen the early warning signs of trouble emerging in the sector.
Until images of customers queuing outside branches of the bank began appearing in the media, few in the industry doubted that there would ever be a liquidity problem that would undermine their ability to keep financing their operations.
Di Rollo had been a consultant at PwC advising clients on risk management. He set up his own business, Almis International, but the banks at both ends of the market were reluctant to accept the need for a better way to monitor their assets and liabilities.
“We were being squeezed. The big banks didn’t want to deal with a small company and the small banks thought they didn’t need us,” he says.
“The best thing that happened to me was when Alistair Darling [Chancellor at the time of the financial crash] said Northern Rock was perfectly safe,” says Di Rollo. “In fact, what happened at Northern Rock made the banks and regulators wake up to the risks they were taking. Prior to that, liquidity was seen as a given and that money could be raised whenever it was needed.
“Generally speaking, liquidity was seen as plentiful and effectively free. RBS funded ABN Amro on short term debt. It was nonsense. When the wholesale markets collapsed the system froze.”
The crash changed all that and Almis’s financial modelling was soon in demand, so much so that it grew quickly rom a small two-man office in Morningside to larger premises in Canning Street employing 10 in skills such as financial systems analysis and software engineering.
“We are providing peace of mind that allows the system to operate with minimal risk,” says Di Rollo, adding that regulation of the financial system is now on a wholly different level to the more cavalier approach that was prevalent pre-crash. “The industry has changed considerably and the banking system is much more robust now,” he says.
Almis currently employs 25 and has evolved so that it provides both external and internal regulatory analysis whereas many of its competitors do one or the other.
Di Rollo says the number of clients – mainly building societies and small banks – has risen from less than 10 before the banking crisis to 65 with turnover over that period rising from £300,000 to £2.5m.
It is developing business with the new banks who face much more stringent control of their regulatory capabilities in order to obtain a licence.
He says the RegTech environment is changing again, with more focus on achieving efficiency in the banking system, aimed at reducing waste and cost.
Brexit changes are still being worked through, though the industry has adopted a policy of carrying on as before until told otherwise, while cryptocurrencies are rising up the agenda.
“The Bank of England wants to be on the front foot with crypto,” he says. “It is coming but it is not there yet.”
Occupation: Founder and director of risk management company
Education: Heriot-Watt university (accounting and computer science)
Career highlights: Unisys (treasurer), PwC (consultant), Almis International (founder and managing director)
What’s your business philosophy?
Integrity is everything, and being focused.
What do you find frustrating?
Anything that stops you getting on with what you are trying to do, like IT security.
Celtic (season ticket holder), cycling, scuba driving and skiing.
If you could invite three people, living or dead, to a meeting or dinner party, who would you choose?
Zinedine Zidane (French international footballer), Charlie Watts (recently deceased Rolling Stones drummer) and Steve Jobs (Apple founder)