Cyber and fraud risks prompt increase in investment
A global study has shown that almost nine in 10 financial services firms plan to increase their investment in risk-management capabilities in the next two years in response to emerging risks of cyber security and fraud.
A global study has shown that almost nine in 10 financial services firms plan to increase their investment in risk-management capabilities in the next two years in response to emerging risks of cyber security and fraud.
The Accenture 2015 Global Risk Management Study found that one in four respondents planned to increase it by more than 20% while three in 10 respondents said their companies plan to increase by more than 20% their investment in Cloud/Software-as-a-Service (SaaS) and big data and analytics.
Respondents identified cyber/IT, credit and fraud/financial crime as the main areas of concern were risks will become significantly more severe over the next two years.
The survey included more than 450 senior risk-management executives in the banking, capital markets and insurance industries from Asia Pacific, Europe and North America.
The report found clear evidence of the increasing impact that cyber security and fraud is having on the financial services firms’ business and the risk-management function in particular. For instance:
• More than one-third (34%) of the respondents said that understanding cyber risk will be the most-needed capability in their risk function.
• Nearly two-thirds indicated that cyber/IT risk will have an increased impact on their business in the next two years, with 26% saying the increase would be significant.
• 82% said that emerging risks, such as cyber and social media, account for more of the chief risk officer’s (CRO) time than ever before.
The study showed that an increasing number of Risk Masters make extensive use of data and analytics to manage key risk categories including fraud and financial crime, cyber and IT risk, and credit, market and regulatory risks. They are also more likely to be investing heavily in digital technologies over the coming years.
Looking ahead, the survey further offers an interesting snapshot at what risk management will look like in 10 years. The landscape is one where analytics permeates decision making. Companies are exploring robotics and artificial intelligence to manage transactional risks. It also forecasts that behaviour prediction will help to effectively manage risk.
Nevertheless financial services firms are currently struggling to keep pace with the demand for people with highly specialised skills, such as cyber risk experts, business analysts, security specialists and fraud experts.
Accenture Finance and Risk Services senior global managing director Steve Culp says to fill these gaps, most firms will have to look outside of their organisations and the competition for the right people is increasingly intense.
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