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EY Global Bank Risk Survey 2023 Finds CRO Role Has Expanded and Evolved

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EY Global Bank Risk Survey 2023 διαπιστωνει ;εκταθεΙ και εξελιχθεΙ” />

The research findings were presented at an event organized by the IIF in Washington DC 73% of CROs worldwide see cyber security as the top risk in the coming year, a threat amplified by geopolitical tensions CROs will need more critical thinking skills, stronger analytics and increased organizational agility to manage current and future risks

The results of the 13th annual survey by EY and the Institute of International Finance (IIF) on the management of banking risks by Chief Risk Officers (CROs) highlight the wide range of risks that CROs will need to think about and prepare for.

While many known risks remain at the top of CROs' agendas, threats to banks are constantly changing and taking on new forms. The survey among Bank CROs worldwide, presented during an event organized by the IIF in Washington on Tuesday, February 13, 2024, also highlights that the role of the CRO is expanding and evolving. To manage current and future risks, CROs will need more critical thinking skills, stronger analytics and increased organizational agility.

As risks to the banking sector– highly volatile, complex, interconnected and coming from everywhere – are constantly proliferating and evolving, creating a market that presents unprecedented challenges for CROs. The ranking of the top risks in our annual survey confirms the persistent and dominant nature of some persistent threats, while also highlighting the multi-dimensional risk profile of banks today.

Cybersecurity continues to dominate the agenda and remains the top priority risk for CROs over the next 12 months, according to 73% of respondents. It's an ever-changing moving target as attacks continue to become more sophisticated and come from new actors.

Concerns about meeting regulatory rules and regulatory expectations, and operational resilience emerge as the second most pressing risk (36%) for the next year. Meanwhile, the most important emerging risks for the next five years include risks related to climate and nature (56%), as well as the use of machine learning and artificial intelligence (53%).

The geopolitical tensions may lead to increased counterparty credit risk for institutions operating in affected regions. Geopolitical developments could also test operational resilience if banks are forced to withdraw from certain markets.

The results of our research suggest that today's volatile market and ever-evolving risks require immediate alignment of the operational risk management model, at all levels from the boardroom to the frontline.

Specifically, the findings emphasize the need for:

Emphasis on critical thinking skills: hiring and training risk professionals who can see beyond traditional risks, synthesize information from disparate data sets and offer detailed guidance without to lose sight of the big picture. Increased organizational agility: embedding agility through adaptive capabilities and processes, developing talent and taking action to address changes in risk prioritization. Further adoption of advanced technology: automate key processes (such as fraud monitoring, audits and reporting) to identify and track risks faster and free up talent for higher value-added work. Stronger data management and analytics capabilities: enhanced risk visibility, with a focus on the future and the ability to identify patterns through predictive modeling, scenario planning, and data visualization.

Commenting on the survey findings, Savvas Pentaris, Partner, Head of Financial Services, EY Cyprus, said: “The findings of the 13th annual EY/IIF Global Bank Risk survey 2023 highlight the wide range of risks that CROs have to deal with. As these challenges are likely to continue in the future, banks will need to further enhance their flexibility and resilience by continuing to build the necessary capabilities and infrastructure to enable them to identify, manage and report risks. For CROs, this translates into developing new skills and making better use of technology.”

Source: www.philenews.com

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