New study looks at ‘From Crisis to Opportunity: Redefining Risk Management’

Published: Thursday, 03 June 2021 09:48

A new study from the analytics organization, SAS, and Longitude looks at approaches to risk management and resilience in the banking sector around the world. The study, ‘From Crisis to Opportunity: Redefining Risk Management’, is based on a survey of 300 senior banking executives across 24 countries. The survey data is complemented by insights from in-depth interviews with the chief risk officers (CROs) of five large, multinational banks.

The key findings include:

Using the survey data, Longitude identified a subset of survey respondents, the 20 percent who had a more mature approach to risk management versus the rest of the sample. These ‘Risk Management Leaders’, as they are identified in the report, are defined by having more automated risk modeling and more advanced risk management capabilities via tools like scenario-based risk analytics, integrated balance sheet management and modeling-as-a-service.

The research shows the Risk Management Leaders have already attained substantial long-term benefits from their risk technology investments, including the ability to forecast further ahead and complete various stress tests more rapidly. Compared to their survey sample peers, the Leaders also report better performance across several key aspects of their operations, including:

Banks can accelerate their transformation journeys by following five guiding principles of risk management transformation, gleaned from the actions and behaviors of the Risk Management Leaders: