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      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 organizations 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 digitalization

        Digitalization 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

      Risk identification

      Banks must implement mechanisms for rapid identification of emerging risks, assess their interdependencies, and use proactive, scenario-driven evaluations to address disruptive events effectively and safeguard operations.

      Risk measurement

      Dynamic risk assessment frameworks must combine qualitative and quantitative methods, implement cross-risk stress testing, and leverage integrated simulation tools for enterprise-wide evaluation of threats and opportunities.

      Risk monitoring, control, and reporting

      Advanced monitoring requires enterprise-wide collaboration, AI-driven solutions for efficiencies, and enhanced reporting systems that focus on actionable insights and alignment with regulatory demands.

      Data and infrastructure

      Effective risk management hinges on clean, integrated data from modernized systems, addressing legacy fragmentation and allowing scalable technologies like AI to unlock valuable insights critical for resilience and compliance.

      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 organization with the demands of the modern risk environment.

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      The future of risk in banking

      Transforming risk management for a dynamic new era
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      Our insights

      How a structured and modern risk management adds value

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      Building a trusted risk function to succeed in a riskier world.

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      Building a trusted risk function to succeed in a riskier world.

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      How to fight financial crime in a bold new era of risk.

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      Global IT internal audit outlook.

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      Adapting risk management practices to prepare for future non-financial risks.
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      Our services

      KPMG Risk Hub is designed to provide an integrated, real-time, holistic view of governance, risk, and compliance (GRC) across every level of the business, all in a single cloud platform.
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      The complexities of today's business landscape requires careful navigation with a trusted guide. The expert insights and innovative solutions of KPMG's Risk services can help organizations to anticipate, manage and mitigate risks, helping you stay ahead of emerging threats and sustaining resilience.
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      Navigate the IT complexities of the digital age to help ensure business continuity and regulatory confidence. By focusing on compliance and helping minimize disruptions, KPMG professionals can help you maintain operational resilience and build trust in an increasingly interconnected world.
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      Our people

      Nancy Chase
      Nancy Chase

      Global Risk Services Leader

      KPMG in Canada

      Justin Malta
      Justin Malta

      Global Leader, Trusted, and Partner

      United Kingdom

      Arvind Sarin
      Arvind Sarin

      Partner

      KPMG in Germany