Digital transformation, cybersecurity are top concerns of CROs

KUALA LUMPUR: Risk management functions within financial services organizations are primarily concerned with cybersecurity and data-related risks at their firms.

This is according to the EY and Institute of International Finance (IIF) eighth annual global bank risk management survey of Chief Risk Officers (CROs): Restore, rationalise and reinvent: a fundamental shift in the way banks manage risk.

Cybersecurity has surged as a concern with respondents, with 77 per cent claiming it is one of the most important risks over the next year, a 22 per cent increase since the 2015 survey.

In addition, a majority of the banks surveyed (86 per cent) cited data-related risks (availability, integrity, etc.) as a top emerging risk over the next five years. Tom Campanile, Partner, Financial Services Office,Ernst&YoungLLP,saidthat banks have reached an inflection point in risk management.

“How banks navigate emerging risks and opportunities presented by technological innovations will dictate their ability to thrive over the next decade,” he said in a statement. “Risk leaders recognize that data is both a risk and a major opportunity.

“Being able to manage multiple challenges and changes simultaneously will distinguish leaders in the industry, especially as cyber threats and digital disruption continue to impact banks globally.”

Respondents noted that with ever-present cyber threats and digital disruption taking place, risk and compliance functions are prioritising key tasks.

The top critical roles within risk and compliance functions are: helping to identify risks and align strategiceffortswithrisktolerance (71 per cent), offering guidance on laws and regulations that could be interpreted as relevant to new technologies, products or services (49 per cent) and providing review and approval prior to product launch (47 per cent).