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

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Accenture’s 2015 Global Risk Management Study: Banking Report provides the insights of 150 banking executives involved in the risk function. See the attached presentation for details of how the risk function in banking is repositioning itself to be a collaborative business partner. Visit www.accenture.com/riskstudy2015 to learn more.

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

  1. 1. 2015 Global Risk Management Study Industry: Banking
  2. 2. 2 Key findings 2Copyright © 2015 Accenture All rights reserved.
  3. 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. 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 CRO’s 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. 5 Contents 5Copyright © 2015 Accenture All rights reserved.
  6. 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. 7 Our methodology 7Copyright © 2015 Accenture All rights reserved.
  8. 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 organization’s 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. 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. 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. 11 Understanding the evolving environment and context for risk management 11Copyright © 2015 Accenture All rights reserved.
  12. 12. Figure 1: Change in senior management’s 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. 13. Figure 2: Senior management’s 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. 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. 15. Figure 4: Statement that best describes the stage of maturity of the bank’s 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. 16 Bridging the gap 16Copyright © 2015 Accenture All rights reserved.
  17. 17. To keep pace with industry challenges, urgent action across five key areas should be considered Bridging the gap Copyright © 2015 Accenture All rights reserved. 17 Build relationships between risk management and other areas of the bank Invest in talent Manage operational risks effectively Cultivate a consistent, resilient and integrated risk culture Accelerate adoption of analytics 1 2 3 4 5
  18. 18. Figure 5a: Statement that best describes the stage of maturity of the bank’s risk and finance interactions Priority 1: Build relationships between risk management and other areas of the bank Copyright © 2015 Accenture All rights reserved. 18 Source: Accenture 2015 Global Risk Management Study – Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Key Findings and Challenges • Only a minority of banking respondents work closely with finance to develop risk models • Similarly, only a minority of risk executives contribute to corporate strategy • The largest gap between current and target behavior lies in collaboration on corporate strategy and Enterprise Risk Management steering activities Actions to Consider • Promote risk management as an enabler of business goals, while maintaining a degree of challenge between risk and other leaders • Collaborate from onset on setting business objectives • Leverage the most frequent interaction in the C-suite – with the CEO – to help integrate across the bank Today Two years’ time Finance and risk leaders do not jointly provide input into corporate strategy and ERM (Enterprise Risk Management) steering Finance and risk leaders have a close working relationship, but do not jointly provide input into corporate strategy and ERM steering Finance and risk leaders may at times be in opposition on some issues, but have a close working relationship with both providing input into corporate strategy and ERM steering
  19. 19. Figure 5b: The extent to which risk management has contributed to the organization achieving the following Priority 1: Build relationships between risk management and other areas of the bank Copyright © 2015 Accenture All rights reserved. 19 Source: Accenture 2015 Global Risk Management Study – Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Key Findings and Challenges • According to banking respondents, the largest gap in current/future collaboration between risk management and finance lies in coordinating the development and maintenance of risk and capital models • Overall, there are aspirations for risk and finance to collaborate on models that drive day-to-day business decision making Actions to Consider • Start by assessing how day-to-day business decision making around risk and capital models can become a collaborative function • Validate data and application of tools and processes across both risk and finance • Identify the key differences in perspectives and reporting that drive decision making Today Two years’ time Risk and capital models are developed largely independently within the risk and finance functions Risk and finance coordinate closely on the development of risk and capital models, but the outputs of these models do not drive day-to- day business decisions Risk and finance coordinate closely on the development and maintenance of risk and capital models, which are used to drive day-to- day business decision making
  20. 20. Figure 5b and 5c: The extent to which risk management has contributed to the organization achieving the following Priority 1: Build relationships between risk management and other areas of the bank Copyright © 2015 Accenture All rights reserved. 20 Source: Accenture 2015 Global Risk Management Study – Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Key Findings and Challenges • Overall, the integration of risk and finance data sources is in progress with additional organizational resources being considered • However, this integration is expected to decline slightly in two years • Large gap exists in current versus target use of integrated data sources and other common resources Actions to Consider • Create an objective to make interaction between risk and finance more seamless • Prioritize speed and flexibility in the organization, driven by risk and finance working together dynamically • Continue to look forward, to keep pace with the velocity of change; target strategic planning to support better decision making Today Two years’ time Risk and finance data are maintained separately and other resources and capabilities (e.g. modeling, IT) are not used Integration of risk and finance data sources is in progress, and other organization resources and capabilities are being considered Risk and finance use integrated data sources, and other organization resources and capabilities are used to enhance efficiency Risk and capital models are developed largely independently within the risk and finance functions Risk and finance coordinate closely on the development of risk and capital models, but the outputs of these models do not drive day-to- day business decisions Risk and finance coordinate closely on the development and maintenance of risk and capital models, which are used to drive day-to- day business decision making
  21. 21. Figure 6: The extent of the interaction between the CRO’s organization and other executives Priority 1: Build relationships between risk management and other areas of the bank Copyright © 2015 Accenture All rights reserved. 21 Source: Accenture 2015 Global Risk Management Study – Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Key Findings and Challenges • Of all the surveyed C-suite executives, the CRO is most likely to interact with the CEO and CSO • Interactions with the CCO are also frequent • Board interaction ranks the highest in very frequent interactions • Interactions with the CMO are among the least frequent Actions to Consider • Continue to build on the progress of risk from a purely defensive role to a more collaborative business relationship role • Look to build stronger relationships with the CMO and broader commercial functions • Social media risk is a significant area of upcoming challenge where CROs need to work closely with the CMO 43% 25% 38% 20% 40% 24% 49% 25% 43% 28% 39% 21% 50% 25% 47% 37% 33% 24% 27% 47% Very frequent Quite frequent
  22. 22. Figure 7: Rating the importance of the risk function as a means of achieving the following Priority 2: Invest in talent Copyright © 2015 Accenture All rights reserved. 22 Source: Accenture 2015 Global Risk Management Study – Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Key Findings and Challenges • Top areas of importance among banking respondents include enabling long-term profitable growth and risk- adjusted performance management • Compared to two years ago, the importance of managing liquidity, capital allocation and reputation management have all dropped Actions to Consider • Acknowledge that recruiting for skills that are broader than core risk management capabilities will be imperative and a challenge • Consider core training and cross-training for innovation and creative skill sets for existing risk professionals 75% 73% 79% 65% 67% 73% 84% 75% 100% 73% 75% 75% 83% 78% 73% 75% 79% 79% 79% 71% 2015 2013
  23. 23. Figure 8: The extent to which risk management has contributed to the organization achieving the following Priority 2: Invest in talent Copyright © 2015 Accenture All rights reserved. 23 Source: Accenture 2015 Global Risk Management Study – Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Key Findings and Challenges • According to banking respondents, risk has a more strategically important role to play in managing the increasing volatility of the economic and financial environment • Risk plays a significant role in enabling long-term growth and improving capital allocation • Most notable decline among respondents has been infusing a risk culture in the organization Actions to Consider • Tie together the skill sets required to execute in a greater risk agenda, within the context of a more integrated risk and finance relationship • Look to build connectivity beyond the finance organization to work collaboratively to bridge the gaps in existing and target capabilities • Maintain the high level of core risk skills to maintain current levels of contribution 84% 77% 83% 76% 81% 77% 95% 80% 84% 80% 73% 81% 86% 81% 78% 81% 81% 81% 83% 75% 2015 2013
  24. 24. Figure 9: Statement that best describes the stage of maturity of the bank’s talent management Priority 2: Invest in talent Copyright © 2015 Accenture All rights reserved. 24 Source: Accenture 2015 Global Risk Management Study – Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Key Findings and Challenges • Internally, over a third of bank respondents say their risk teams have a lack of key skills, such as specialized modeling and emerging risks • Only 13% say they have the internal resources, including specialty skills, but respondents hope to nearly double this in two years’ time Actions to Consider • Investment in understanding new technologies for risk functions may need external resources; technology advances may be at a faster pace than a bank’s ability to train its staff • Understand the impact of unstructured data in new modeling and surveillance activities Today Two years’ time The risk team has insufficient talent resources to carry out the functions it is asked to perform The risk team lacks internal resources in some specialized areas (modeling, emerging risks) The risk team has internal resources even in specialized areas (modeling, emerging risks)
  25. 25. Figure 10: The expected change to the total level of investment in risk management capabilities in the next two years Priority 2: Invest in talent Copyright © 2015 Accenture All rights reserved. 25 Source: Accenture 2015 Global Risk Management Study – Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Key Findings and Challenges • Most bank respondents expect to increase their investment in risk capabilities between 0-20% • Nearly a quarter of the banks surveyed expect a significant increase (>20%) in their total investment in risk management capabilities Actions to Consider • Target investments to match the areas of key concern: – Cyber risk – Emerging digital technologies – Analytics – Social media 13% 60% 51% 0% 14% 0% 0% 35% 3% 23% 2015 2013
  26. 26. 37% 33% 30% 29% 26% 25% 23% 19% 15% 13% Figure 11: The skills and capabilities that will be most in demand by the risk management function Priority 2: Invest in talent Copyright © 2015 Accenture All rights reserved. 26 Source: Accenture 2015 Global Risk Management Study – Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Key Findings and Challenges • According to bank respondents, understanding cyber risk and technology will be in most demand • Data management is also a top sought after capability • While social media is a top concern, the skill set ranks below general business knowledge Actions to Consider • Broadening the skillset of today’s risk function will mean competing with technology companies for a similar talent pool • Generalists with a good overview of different risk topics should be given more consideration • Consider developing talent by utilizing rotational roles and cross-skilling
  27. 27. Figure 12: The types of expertise recruited in the past two years, and skills to be recruited in the next two years Priority 2: Invest in talent Copyright © 2015 Accenture All rights reserved. 27 Source: Accenture 2015 Global Risk Management Study – Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Key Findings and Challenges • Cyber risk specialists are in high demand among bank respondents. This will decrease as interest shifts to business analysts, security specialists and fraud experts • Commercial skills are also high in demand now, in the form of business analysts, strategic planners and accountants • Data scientists also show a spike in demand Actions to Consider • Increase the scope of the roles to integrate quantitative skills with general business skills and problem solving, so the risk organization can drive key discussions • Understand that there will be a war for talent • Use retention and development as additional approaches to staff the business for desired risk skill sets 29% 36% 29% 27% 33% 37% 47% 41% 37% 31% 35% 47% 49% 33% 49% 28% 42% 49% 50% 32% 40% 53% 55% 39% Past two years Next two years
  28. 28. Expected change in severity of the key risks facing the business Priority 3: Manage operational risks effectively Copyright © 2015 Accenture All rights reserved. 2828 Source: Accenture 2015 Global Risk Management Study – Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Key Findings and Challenges • Banking respondent’s focus on growth priorities means considering different business models, for example: – Omni-channel banking – Digital businesses • New business models and rewards means understanding and mitigating new risks – Cyber risk – almost two thirds of respondents believe that this will become more severe – Fraud Actions to Consider • Assess current IT platforms – are they flexible and agile enough to meet customer demands from new digital channels now, or as they evolve? • Invest in IT infrastructure that can strengthen operational risk capabilities – Real-time indicators of limits, collateral management – Dashboards, smart alerts – Security systems • Align finance and risk functions to tackle operational risks in an integrated fashion, similar to how they collaborate on market and credit risk management • Approach cyber risk with a holistic framework to eliminate historic silos of risk and IT security
  29. 29. Figure 13: Expected severity of the following risks facing the business over the next two years Priority 3: Manage operational risks effectively Copyright © 2015 Accenture All rights reserved. 29 Source: Accenture 2015 Global Risk Management Study – Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Key Findings and Challenges • According to banking respondents, cyber and IT risks top the list of risks facing their business over the next two years • Fraud also ranks highly • Traditional risks, such as credit, strategic, liquidity, regulatory, business and legal still maintain high severity levels Actions to Consider • Work collaboratively to eliminate traditional silos, such as risk and IT security, to combat cyber and IT risks effectively • Use new digital tools to both monitor and measure the parameters of fraud risk • Take a holistic approach to traditional risks and use tools to help gain an enterprise wide view of risks from innovative new products 65% 62% 61% 59% 57% 57% 56% 56% 56% 55% 53% 52% 52% 50% 47% 42% Increase
  30. 30. Figure 14: Statement that best describes the stage of maturity of the bank’s risk culture Priority 4: Cultivate a consistent, resilient and integrated risk culture Copyright © 2015 Accenture All rights reserved. 3030 Source: Accenture 2015 Global Risk Management Study – Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Key Findings and Challenges • Risk culture maturity remains an area open to improvement according to bank respondents • Most have made some improvements, but nearly 40% of respondents face issues in successful implementation • Only 11% of respondents have reached a strong level of maturity, with over a quarter aspiring to the highest level in two years Actions to Consider • Challenges will arise in new business models, such as digital, omni-channel. Clear policies and procedures should be consistent across existing businesses • Rely on the principles of the “three lines of defense” model and apply them contextually with risk oversight, risk information and related flows of information Today Two years’ time We are at the early stages of developing and implementing a risk culture We have made improvements in embedding our risk culture, but we still have work to do and face barriers to its full implementation We have a strong and consistent risk culture that is understood and implemented across the entire organization
  31. 31. Figure 15: The main obstacles to embedding a consistent, organization-wide risk culture Priority 4: Cultivate a consistent, resilient and integrated risk culture Copyright © 2015 Accenture All rights reserved. 3131 Source: Accenture 2015 Global Risk Management Study – Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Key Findings and Challenges • Complex human nature, coupled with challenges overcoming preconceptions and various departmental silos are the biggest obstacles in implementing a single risk culture according to banking respondents Actions to Consider • Reach across the business with leadership from the risk function in training • Measure risk culture and the degree that it is embedded throughout the bank by looking at key metrics – then align employee incentives to metrics. Report results to board level • Rethink organizational structure; benefits of centralized versus embedded
  32. 32. Figure 16: Risk management’s use of data and analytics in addressing the following types of risk Priority 5: Accelerate adoption of analytics Copyright © 2015 Accenture All rights reserved. 32 Source: Accenture 2015 Global Risk Management Study – Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Key Findings and Challenges • Cyber/IT risk and operational risks top extensive use of data and analytics • Moderate users of data and analytics include business risks, IT selection, regulatory risks, liquidity risks and market risks • A minority of respondents see themselves as extensive users of data and analytics, but as a group, aspire to progress significantly Actions to Consider • Increase scope of data and analytics drive insight across the organization, beyond the traditional strength areas • Leverage information used in managing cyber/IT risk and operational risk data to inform IT investment needs and data management strategies to be leading users of the anticipated adoption curve 36% 24% 41% 30% 21% 42% 32% 38% 26% 43% 29% 42% 45% 25% 27% 43% 39% 33% 27% 45% 27% 48% 16% 46% 21% 40% 24% 35% 20% 39% 29% 29% 44% 31% Extensive Moderate
  33. 33. Figure 17: Statements that best describe the stage of maturity of the bank’s risk analytics Priority 5: Accelerate adoption of analytics Copyright © 2015 Accenture All rights reserved. 33 Source: Accenture 2015 Global Risk Management Study – Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Key Findings and Challenges • 30% of respondents say senior management is a passive user of risk analytics • Nearly 40% of respondents say that risk analytics is applied at least partly across the organization • Overall, 38% of respondents report that data and risk analytics is integrated into everyday operations of the risk function Actions to Consider • Opportunities to improve exist in both the risk function and at senior management levels • Senior management can improve their proactivity in using risk analytics to inform business decisions • Risk functions can elevate the use of data and risk analytics beyond everyday use to strategic, high-level decision making Now Two years’ time
  34. 34. Figure 18: Rating risk management’s level of expertise to influence strategy and major decisions in the following areas Priority 5: Accelerate adoption of analytics Copyright © 2015 Accenture All rights reserved. 34 Source: Accenture 2015 Global Risk Management Study – Banking respondents. Access at: http://www.accenture.com/riskstudy2015 Key Findings and Challenges • Information/network security, big data and analytics, are major areas of substantial functional expertise for bank respondents • Technology strategy is an important and significant capability to influence strategy and decision making • Cloud computing, mobility are also areas for significant expertise Actions to Consider • Win the war for talent by recruiting and developing skillsets in math, analytics and decision science • Big data-driven analytics can make improvements in decision making – if aligned with and tied to corporate- level strategies • Use “test and learn” innovation processes to explore new ideas at high velocity 24% 4% 30% 41% 19% 6% 30% 45% 18% 4% 30% 48% 11% 1% 36% 51% 15% 0% 41% 43% 21% 2% 28% 49% High Moderate Low Non-existent
  35. 35. 3535 To learn more about the study and to obtain your copy of the Banking Report please go to: www.accenture.com/banking- riskstudy2015 Copyright © 2015 Accenture All rights reserved. Source: Accenture 2015 Global Risk Management Study – Banking respondents. Access at: http://www.accenture.com/riskstudy2015
  36. 36. 36 An evolving landscape 36Copyright © 2015 Accenture All rights reserved.
  37. 37. 2005 2015VS Decisions informed by past events Risk only outlook Focused on credit, market and operational risk Narrow definition of operational risk Clear demarcation between three lines of defense “Left brain” – quantitative; analytical approach Prioritized control and prevention Tactical attitude: centered on day-to-day risks Spreadsheet-based management Digital? What’s digital? Looking forward, with “next day” thinking Recognizing risk AND inherent opportunity Aware of a growing range of emerging risks More comprehensive definition of operational risk Three lines of defense, with fluid interaction embedded in the business “Left AND right brain” – creative, innovative understanding A balance of control, prevention, and enablement Strategic awareness: focused on long-term business challenges Increasingly integrated data sources Emphasis on digital risks and opportunities The Risk Landscape Risk management in 2025 Analytics now permeates decision making Companies are exploring robotics and artificial intelligence to manage transactional risks Behavior prediction helps to effectively inform risk management Rise of the Chief Risk and Return Officer Risk management is the career path to the C-suite Single data source drives reporting and analytics activities For more information, please visit: www.accenture.com/riskstudy2015 © 2015 Accenture. All rights reserved.
  38. 38. Disclaimer: This presentation is intended for general informational purposes only and does not take into account the reader’s specific circumstances, and may not reflect the most current developments. Accenture disclaims, to the fullest extent permitted by applicable law, any and all liability for the accuracy and completeness of the information in this presentation and for any acts or omissions made based on such information. Accenture does not provide legal, regulatory, audit, or tax advice. Readers are responsible for obtaining such advice from their own legal counsel or other licensed professionals. About Accenture Accenture is a global management consulting, technology services and outsourcing company, with more than 323,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$30.0 billion for the fiscal year ended Aug. 31, 2014. Its home page is www.accenture.com. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. 2015 Global Risk Management Study Industry: Banking Copyright © 2015 Accenture All rights reserved. 38

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