RISK AND COMPLIANCE IN 2022: DO NOT UNFASTEN YOUR SEAT BELT JUST YET
The sigh of relief at the end of 2021 was audible. Bank executives had spent the year on tenterhooks, holding their breath amid well-founded concerns over the contagious economic effects of the coronavirus (COVID-19) pandemic and the detrimental impacts on the health of their lending books. The predictions made a year earlier – and the headlines and articles which accompanied them – were dire and made it clear that apocalyptic conditions were nigh. With banks travelling at cruising altitude, the ‘fasten seat belt’ sign illuminated in response to severe turbulence directly ahead, a sense of foreboding gripped the industry.
The headlines and articles at the beginning of 2022 read very differently: ‘The non-performing loan tsunami that never happened’ being one of many prime examples. That is not to say the banking industry has escaped unscathed. There has undoubtedly been a degree of collateral damage, but not to the extent that the world is now addressing the twin challenges of a global pandemic with the bonus of a financial crisis for an extra dash of difficulty. Having exhaled, banking can reflect upon what has happened and consider what the future holds in store, not just for institutions but their stakeholders, including customers, regulators, shareholders, employees, technology providers and ecosystem partners, too. While the predictions for 2022 are not all doom and gloom, it is not all rainbows, sunshine and unicorns either. The seatbelt sign remains on.
Against this realistic but hopefully not too depressing backdrop, let us consider risk and compliance in 2022 and the operational priorities of banks.
Apr-Jun 2022 Issue
SAS