Post on 08-Jul-2018
Regulatory demands continue to drive the risk agenda
Top risk priorities
Compliance risk
Risk appetite
Liquidity
Risk culture
57%
47%
32%
28%
28%
Regulatory compliance
Risk appetite
Credit risk
Operational risk
61%
59%
57%
48%
Board CRO
Credit risk
Regulatory capital management 37%
of banks are reporting good progress integrating risk appetite at the firm level, but still having trouble embedding it further down the organization.
Embedding risk appetite remains a challenge
Only 43% of banks report that individual business decisions are “largely tested” against risk appetite
BANK
55%
43%
Largelytested
51%
Somewhattested
6%
Nottested
66% continue to review risk appetite progress on an annual basis
17%
Quarterly
15%
Every six months
2%
Event-driven trigger to review
66%
Annually
Overhauling risk oversightRethinking risk managementey.com/bankingrisk
Overhauling risk oversightRethinking risk managementey.com/bankingrisk
Risk culture remains in a state of transition
Methods to monitor adoption of desired risk culture
Top initiatives to strengthen risk culture
are in the process of changing their culture
75%of banks report cultural change is a work in progress
81%
Internal whistle blowers
Issues raised via internalaudit reports
Scale of breach of risk limits
Reviews of action takenwhen controls are breached
Cultural surveys
50%
Embedding risk appetite
Reinforcing accountability
Enhancing messages and tonefrom the top
Enhancing communication and trainingregarding risk values and expectations
Aligning compensation with risk-adjusted performance metrics
68%
65%
50%
47%
81%
77%
75%
71%
63%
Overhauling risk oversightRethinking risk management
Bank boards and chief risk officers continue to make major changes to the way their institutions monitor, measure and implement risk programs and how they manage non-financial risks.
Addressing non-financial risks more effectively is a significant area of focus for the CRO
of banks take a tailored approach to addressing non-financial risks in their operational risk framework
Market conduct
Fraud or rogue traders
Reputational risk
Systems risk
Compliance risk
Money laundering
Conduct risk
Regulatory risk
60%
48%
48%
Top non-financial risks
67%
74%
67%
67%
64%
Who leads the risk culture change initiative?
74%
The COO(chief operating officer)
The CHRO(chief HR officer)
The CEO(chief executive officer)
Cross-functionalsteering group
The CRO(chief risk officer)
3%3%
24%
43%
27%
© 2
015
EYG
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imite
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ight
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Rethinking risk management: Banks focus on non-financial risks and accountability, EY’s 2015 risk management survey of major financial
institutions, is the sixth annual study of risk management practices conducted in cooperation with the Institute of International Finance (IIF). A total of 51
firms across 29 countries participated in this year’s study.
Help your bank adapt to a new risk management orderVisit ey.com/bankingrisk
Banks are changing their approach to risk management, creating proactive methods to manage non-financial risks
and making front-office staff more accountable.