Risk management functions will have to reinvent themselves and become enablers and drivers of digital transformation. How banks navigate the risks and opportunities presented by technological innovations will dictate their ability to thrive.
The eighth annual global bank risk management survey, conducted by EY in collaboration with the Institute of International Finance (IIF), explores key focus areas and challenges for banks as they move through three distinct phases of a 15-year risk transformation journey.
Three key findings emerged from this year’s survey:
- After fully streamlining structures and processes, banks have to drive digital transformation across the entire firm, from customer to operations.
- Risk management functions must reinvent themselves to become enablers and drivers of innovation and growth, leveraging technology to do so.
- Cybersecurity has overtaken regulatory matters as the top concern of boards and CROs.
A 15-year risk transformation journey is underway
The first phase of the risk management journey occurred during the five to six years after the financial crisis — a stage we call Restore. The second phase is happening now: Rationalize. And the final phase looms in coming years: Reinvent. We highlight below key elements from each stage, in four categories:
- Regulatory context
- Technology focus
- Risk focus