EXECUTIVE PERSPECTIVES ON TOP RISKS IN THE FINANCIAL SERVICES INDUSTRY
Cyber security risks, uncertainties in political regimes in certain parts of the world, technological innovation, expanding regulation and oversight, falling oil prices, geopolitical conflicts – these and a host of other significant risk drivers are all contributing to the risk dialogue in boardrooms and executive suites.
There are encouraging signs of an improving business climate in most industries, as exhibited by strong equity markets, lower unemployment rates, resurgence in consumer confidence, manufacturing and construction activity, and falling oil and gas prices, among other factors. However, the global business environment continues to evolve rapidly, creating opportunities and challenges for all types of organisations.
Entities in virtually every industry and country are reminded, all too frequently, that they operate in a risky world. Recent data breaches affecting financial institutions, major retailers and other high-profile companies, as well as numerous governance lapses, vividly illustrate the reality that organisations of all types face risks that can suddenly propel them into global headlines, creating complex enterprise-wide risk events that threaten reputation and brand. The rapid and steep decline of oil prices was not anticipated by many players in the energy industry, reminding everyone that they need to expect the unexpected. Boards of directors and executive management teams cannot afford to manage risks casually on a reactive basis, especially in light of the rapid pace of disruptive innovation and technological developments.
In their third annual survey, Protiviti and North Carolina State University’s ERM Initiative report on the top risks on the minds of global boards of directors and executives for 2015. Our respondent group, composed of more than 270 board members and C-suite executives worldwide, provided their perspectives about the potential impact in 2015 of 27 specific risks. One in three respondents operates in the financial services industry. The following commentary focuses on the top five risk areas for financial services organisations in 2015, as identified by these respondents.
Apr-Jun 2015 Issue