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How EY can Help
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Discover how EY can help the banking & capital markets, insurance, wealth & asset management and private equity sectors tackle the challenges of risk management.
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2. Risk management traditionalist: enhancing core capabilities
For all the “new” threats that have emerged in recent years, CROs can’t afford to lose sight of traditional risk types, including operational resilience. Significant proportions of survey respondents said they need more operational resilience and business continuity skills in both the first and second lines.
The macroeconomic uncertainty of the last few years has led to a resurgence of financial risk as an area of concern among respondents. One-third of CROs cited liquidity risk as a top priority for the next 12 months, up from 15% last year. And liquidity risk was named by two-thirds of CROs (66%) as the top financial risk for the next year, followed by consumer or retail credit risk (56%), wholesale credit risk (52%) and interest rate risk for the banking book (48%).
Survey results from the last few years showed that financial risks were perceived to be largely under control in the eyes of CROs. But the significant banking sector volatility in early 2023 showed just how quickly traditional risks can manifest and how severely they can impact banks. According to 40% of CROs, their bank’s playbook for recovery and resolution planning is only high level and needs enhancement.