In an era marked by constant disruption, the role of risk management in banking is evolving rapidly. To navigate this landscape, Chief Risk Officers (CROs) are no longer just compliance overseers; they are strategic guides steering organisations toward resilience and opportunity. Here’s a closer look into the forces shaping the future of risk in banking, as explored in KPMG's extensive research.
Key drivers of the evolving risk landscape
Several factors are reshaping risk management in banking:
Emerging risks
Several interconnected factors are reshaping banks’ risk functions, including global fragmentation into trading blocs, geopolitical conflicts, and emerging technologies that present both risks and opportunities. KPMG's research highlights economic volatility and geopolitical complexity as the top challenges for banks.
Managing digital operations and digitalisation
Digitalisation is transforming banking services and controls, offering significant potential benefits but also exposing institutions to evolving risks like fraud, consumer protection issues, and system disruptions. To stay competitive, banks must balance innovation with effective risk management.
Meeting evolving regulations
Banks face diverse regulatory challenges, including compliance and ESG requirements, which vary by region and complicate adherence. KPMG's research identifies adapting to these evolving regulations as a key to transforming risk management, with compliance as a top strategy. While achieving compliance requires significant investment, AI and digital tools can lower costs. Banks' expertise in regulation gives them an advantage over fintech’s.
A roadmap to the future of risk management
Transform risk into opportunity
For risk leaders ready to embrace the future, this paper delivers some of the knowledge and tools necessary to help navigate today’s complex challenges. Explore how to turn risk into an opportunity for value creation and align your organisation with the demands of the modern risk environment.
