These are turbulent times for the financial services industry.
Not only are shifting market conditions and the ever-evolving regulatory landscape creating new hurdles for firms, but the series of outside risks facing financial services risk managers has never been more complex. Now these professionals need to address business interuption, reputation and other traditional risks, as well as cyber terrorism, fraud and other 21st-century threats.
And it likely will get worse before it gets any better, as the tighter-margin business environment is forcing many firms to expand their operations into more risky areas, increasing their exposures at the same time.
According to a new study released this week by Accenture, corporate risk managers are prepared to pay for it, however.
Nearly 90% of the financial services exucutives polled by Accenture said that they plan to increase their investment in risk management in the next two years, and more than one in four (26%) said they would up their spending by more than 20% in that time. Roughly two-thirds (65%) said that cyber and IT-related risks would have an increased impact on their business through 2015, with 25% calling that increase "significant."
"At a time when the regulatory focus has never been keener, financial services firms are taking a hard look at their existing strategies and starting to identify where they want to extend their business to achieve growth," said Steve Culp, senior global managing director for Accenture Finance and Risk Services in a statement. "The willingness to accept greater business risks will also expose financial services firms to emerging risks – including cyber, data privacy, reputational, social media and new conduct risks – requiring risk professionals to play an enhanced role."
The findings were based on a survey of 450 senior risk management officials in the banking, capital markets and insurance industries.
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