Accenture 2015 Global Risk Management Study: Banking Report Key Findings and Insights

Click here to load reader

  • date post

    03-Aug-2015
  • Category

    Technology

  • view

    456
  • download

    4

Embed Size (px)

Transcript of Accenture 2015 Global Risk Management Study: Banking Report Key Findings and Insights

1. 2015 Global Risk Management Study Industry: Banking 2. 2 Key findings 2Copyright 2015 Accenture All rights reserved. 3. Key challenges Signs of growth 5 key priorities Risk Management in the Banking Sector Bank respondents to the Accenture 2015 Global Risk Management Study face 3 key challenges: 1 2 3 Tough economic climate Demanding regulations Competition from digital innovators 41% 79% 14% of respondent banks have higher risk appetites for new product development. think risk functions play a critical/important role in enabling growth. say they have achieved fully risk-based decision- making. 1 2 3 4 New relationships Risk management as an enabler to the business. 22% of bank respondents say risk and finance work on corporate strategy. 21% say the CRO has very frequent dealings with the CIO and CTO. Talent gaps The war for specialized risk talent to intensify. 83% of banking respondents to grow investment in risk management capabilities. 37% say understanding cyber risk is a capability that will be most in demand in their risk function. Operational risks Driven by changes in the commercial landscape. 65% of respondents expect cyber risk to become more severe. 59% see strategic risks increasing. Robust risk culture Respondent banks struggling to embed enterprise-wide. 11% say they have a consistent risk culture. 37% believe human nature is stopping this from happening. 5 Data and analytics Low usage among surveyed banks. 9% say risk analytics is integrated with strategic decision-making. 22% expect this integration to occur in two years time. 75% have used analytics to address business and market risks. For more information, please visit: www.accenture.com/riskstudy2015 Source: Accenture 2015 Global Risk Management Study Banking respondents 2015 Accenture. All rights reserved. 4. 61% of risk masters believe their risk function can play a critical role in enabling profitable growth. 54% of risk masters believe they can help enable this growth to a great extent. 35% of non-masters report the same view. Around 1 in 10 respondents to the Accenture 2015 Global Risk Management Study are risk masters. 10% 61% of risk masters agree strongly that emerging risks, such as cyber and digital, are consuming a greater proportion of the CROs time. 35% of non-risk masters feel strongly about this. 61% of risk masters agree strongly that they employ dedicated technology specialists to help manage digital risk. 27% of non-masters feel the same. Stronger focus on profitable growth Stronger focus on emerging risks Growing digital experience For more information, please visit: www.accenture.com/riskstudy2015 Source: Accenture 2015 Global Risk Management Study all respondents What makes a risk master? 2015 Accenture. All rights reserved. Better handle on regulatory and compliance More extensive use of analytics 37% of risk masters believe strongly that regulatory change is receding in relation to other requirements. 25% of non-risk masters see regulatory change receding in the same way. 36% of non-masters feel the same. More risk masters make extensive use of analytics to manage key risk categories including fraud and financial crime, cyber and IT risk, and credit, market and regulatory risks. Risk masters are also more likely to be investing heavily in digital technologies. 5. 5 Contents 5Copyright 2015 Accenture All rights reserved. 6. 6 Contents Copyright 2015 Accenture All rights reserved. A Our methodology B Understanding the evolving environment and context for risk management 1. Build relationships between risk management and other areas of the bank 2. Invest in talent 3. Manage operational risks effectively 4. Cultivate a consistent, resilient and integrated risk culture 5. Accelerate adoption of analytics C Bridging the gap 7. 7 Our methodology 7Copyright 2015 Accenture All rights reserved. 8. 4th iteration of our Global Risk Management Study (2009, 2011, 2013) 2015 Global Risk Management Study: Paths to Prosperity For the 2015 study, we surveyed 470 CFOs, CROs, CEOs, CCOs and CDOs involved in their organizations risk decisions Our respondents came from North America, Europe and the Asia Pacific regions The survey focused on three industry sectors: Banking, Insurance, Capital Markets In addition to the survey we conducted 50 qualitative client interviews Introduction Copyright 2015 Accenture All rights reserved. 8 9. 9 2015: Paths to Prosperity 9 Risk management continues to make a crucial shift but choices need to be made. Seen as a collaborative partner to enable business goals instead of a controlling function to be circumnavigated. Copyright 2015 Accenture All rights reserved. Source: Accenture 2015 Global Risk Management Study Banking respondents. Access at: http://www.accenture.com/riskstudy2015 10. We surveyed 470 C-suite officers across geographies and 12 countries Study demographics Copyright 2015 Accenture All rights reserved. 10 Source: Accenture 2015 Global Risk Management Study Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Country Geography Regional target Respondents Australia Asia Pacific 150 30 China 30 Hong Kong 30 Japan 30 Singapore 30 UK Europe 170 50 Germany 30 France 30 Spain 30 Italy 30 USA North America 150 100 Canada 50 Total 470 470 Company size Total Between US$1bn and US$5bn 235 Revenues over US$5bn 235 Total 470 Respondent Total Chief Risk Officer 141 Chief Executive Officer 78 Chief Financial Officer 147 Chief Compliance Officer 28 Chief Operations Officer 31 Chief Data Officer/CIO 45 Total 470 Sectors Sector count Asia Pacific Europe North America Banking 150 50 50 50 Capital Markets 170 50 70 50 Insurance 150 50 50 50 Total 470 150 170 150 11. 11 Understanding the evolving environment and context for risk management 11Copyright 2015 Accenture All rights reserved. 12. Figure 1: Change in senior managements appetite for risk Section 1: The new environment and context for risk management Copyright 2015 Accenture All rights reserved. 12 Source: Accenture 2015 Global Risk Management Study Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Key Findings and Challenges Banking respondents have the greatest risk appetite for new product development Also trending are greater risk appetite for growth and expansion showing higher trend in mergers and acquisitions, and joint venture risk appetite Higher risk appetite for digital transformation technologies Actions to Consider Integrate risk fundamentals across major corporate initiatives Help strike the right balance between capital, risk and return by positioning risk as a value-adding discipline Expand the reach of risk and risk data utilization to now encompass sales and marketing Greater risk appetite 13. Figure 2: Senior managements approach to delivering regulatory change programs Section 1: The new environment and context for risk management Copyright 2015 Accenture All rights reserved. 13 Source: Accenture 2015 Global Risk Management Study Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Key Findings and Challenges Overall, the position of risk management within surveyed banks is strengthening However, nearly two-thirds are primarily focused on regulatory compliance Currently, there is increasing interest in gaining better return from compliance activities Actions to Consider Invest in the digital technologies that can help provide new opportunities for both basic compliance efficiencies, as well as the aspiration to go beyond compliance functions Leverage compliance data to help provide greater insight via a virtuous cycle improve or automate processes and free up time for strategic activities 14. Figure 3: How senior management goes beyond regulatory compliance Section 1: The new environment and context for risk management Copyright 2015 Accenture All rights reserved. 14 Source: Accenture 2015 Global Risk Management Study Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Key Findings and Challenges Nearly 60% of banking respondents reported that senior management goes beyond regulatory compliance Of these respondents, most report that it is used to reorganize operating models to pursue strategic business imperatives Overall, risk management is growing in maturity Actions to Consider Assess where the risk function can proactively use its influence in the business Focus development on license to operate issues, and shift attention away from purely standalone regulatory issues Topics may include geographic expansion, mergers and acquisitions, and new product development opportunities 15. Figure 4: Statement that best describes the stage of maturity of the banks risk-based decision-making Section 1: The new environment and context for risk management Copyright 2015 Accenture All rights reserved. 15 Source: Accenture 2015 Global Risk Management Study Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Key Findings and Challenges Bank respondents showing a fairly defensive position as they continue to focus primarily on addressing regulatory risk rather than adopting risk-based decision-making Actions to Consider Provide oversight across the business and join the dots between strategic plans from different parts of the organization Mirror the digital change impacts in the industry and encourage an agile risk function that can adapt to the pace of changes in the industry 9% 19% 22% 11% 20% 17% 14% 22% 27% 39% 1 2 3 4 5 Risk management primarily focused on regulatory needs/ license to operate Risk management mainly focused on regulatory needs/ license to operate, but some focus on broader strategic risks Fully risk-based decision making with strategic risk management inputs for major decisions Today Two years time 16. 16 Bridging the gap 16Copyright 2015 Accenture All rights reserved. 17. To keep pace with industry challenges, urgen