Why Experienced Risk Teams Are More Vulnerable Than New Ones

When we talk about financial risk management, one idea often gets repeated: experienced teams are the safest hands in the room. They’ve seen it all before, they know the signs, and they’ll spot the danger early.

But let me pause us there.

That belief doesn’t always hold up. In fact, recent market shifts have shown us something more uncomfortable. Experience, while undoubtedly valuable, can quietly become a liability. Especially when it causes a team to lock onto patterns that no longer apply.

The market isn’t what it was a decade ago. And the instincts that served us well back then might not serve us at all today.

Veteran risk teams entered the 2020s with models and heuristics honed through years of stability. Many had grown accustomed to the low-default environment of the post-2008 decade, where long cycles of calm reinforced the idea that past patterns were reliable guides. But in 2023, UK corporate insolvencies surged to their highest recorded level, 43% above pre-pandemic baselines. That change caught many experienced teams off guard. What had once been useful instincts became technical debt: tools built for a different era, now operating in a landscape that had quietly but fundamentally changed.

The shift exposed a deeper structural issue. Pattern recognition is powerful, but it is only as good as the relevance of the patterns being recognised. When early warning signs fail to match historical precedents, experienced teams can be slower to respond than newer ones, not due to lack of knowledge, but because their expectations are shaped by conditions that no longer apply. This is what behavioural economists call success blindness: long periods of performance can degrade sensitivity to risk. Signals that deviate from old norms are too easily dismissed as noise.

Why does this happen?

In my experience, this bias is compounded when dissent is filtered out of team culture. In long-standing, high-performing teams, consensus often becomes a proxy for confidence. Junior analysts, aware of their limited tenure, may hesitate to question assumptions embedded by senior leadership. In some organisations, silence is treated as alignment. That absence of challenge can become a hidden vulnerability. If no one is raising uncomfortable questions, it may not be a sign of rigour, but of risk going unvoiced.

How forward-thinking teams respond

High-performing organisations counter this by deliberately creating friction. Some appoint a rotating challenger to question assumptions in key decisions. Others run structured pre-mortems or encourage contrarian takes during major risk reviews. The point is not to undermine senior judgment, but to ensure it remains open to adaptation. In a changing environment, risk management systems must surface disagreement rather than smooth it away.

Market conditions are not the only drivers of this rethink. Regulatory expectations have also evolved. Supervisory authorities in the UK and EU have been clear that backward-looking compliance is no longer sufficient. New regimes emphasise resilience: not simply showing documentation, but demonstrating operational continuity under stress.

Static registers and annual reviews that once satisfied auditors are now being viewed as inadequate. Resilient organisations are expected to demonstrate agility, not just completeness.

Bringing experience and adaptation together

Let me be clear here: doing this well doesn’t mean throwing out what works. It means putting experience and adaptability side by side, and asking them to work together.

Human judgment still matters. It always will. But those judgments must now be tested and retested against live conditions, not past assumptions. We need real-time signals feeding into decision cycles. We need systems that surface the outliers and flag the weak signals that don’t yet fit a narrative. And we need workflows that elevate those signals instead of smoothing them away.

These teams know that experience is a powerful input. But it’s just that: one input among many. And it must be held up to the same scrutiny as everything else.

What risk teams should be doing in 2026

So what does this look like in practice? It means building time into your rhythm for strategic resets. Not just once a year, but quarterly. Ask: what’s changed since our last review? What’s no longer serving us?

It further means treating dissent as a form of resilience. If your junior analyst flags something unusual, don’t brush it aside. Invite them in. Make room for people to speak without needing to be right. The earlier you surface discomfort, the more time you have to respond.

It also means aligning your dashboards with what you actually want to act on. Not just backward-looking KPIs, but forward-looking stress indicators. Near misses. Contradictory data. Things that suggest a regime shift, even if you can’t yet explain it.

And it means building teams that are confident enough to change their minds. That might be the hardest thing to do in a high-performing risk team. But it’s also the thing that separates the steady from the static.

Importantly, I need to re-iterate that this is not a call for disruption for its own sake. The goal is not to unsettle, but to remain steady in the face of change. That requires institutional humility: recognising that what worked yesterday may not work tomorrow. It also requires practical mechanisms. For instance, Scenarios by Company Watch allows you to test how different assumptions, counterparties, or shocks would play out under stress. Additionally, reassessments of high-risk models. Dashboards that incorporate early-warning signals, even if they do not yet map to past outcomes. Most of all, it requires leadership that rewards curiosity and makes room for dissent.

In our own work, we encourage risk teams to treat dissent as data, not disloyalty. We ask what has changed since the last model update. We encourage the use of Experiments by Company Watch  to test various questions; introducing new inputs, running tailored simulations, and seeing how decisions or supply chains respond under different conditions. We ask whether silence in the room means agreement, or hesitation. And we track not just outcomes, but the rigour of the process that led to them.

Experienced teams have an advantage when they remain adaptable. But when experience becomes rigid, it turns strength into exposure. The most resilient organisations I observe are those that treat risk management not as a finished structure, but as a dynamic practice. They invest in systems that update assumptions. They make space for questions. And they lead with a quiet confidence that comes not from having the right answers, but from being open to revisiting them.

That posture matters. Because the next risk event will not look like the last. And the organisations that respond best will be those that stayed prepared without becoming entrenched. Not reactive. Not static. Just steady.