Accenture 2015 Global Risk Management Study: Capital Markets Key Findings and Insights

2015 Global Risk
Management Study
Industry: Capital Markets

2
Key findings
Copyright © 2015 Accenture All rights reserved. 2

Source: Accenture 2015 Global Risk Management Study – Capital Markets respondents. Access at: http://www.accenture.com/riskstudy2015
Key challenges Risks on the horizon
5 key priorities
Risk Management in the Capital Markets Sector
Capital markets respondents to the Accenture 2015
Global Risk Management Study face 3 key challenges:
1 2 3
Volatile
markets
Demanding
clients
Digital
disruption
1 2
3 4
Collaboration and integration
Ties between risk and finance could be stronger.
22%
of capital markets
respondents say risk and
finance coordinate closely
to drive decision making.
22%
have integrated
data sources for risk
and finance.
Operational risk
Digital, social and big data rising.
58%
of capital markets
respondents expect
an increase in the
severity of cyber risks.
31%
of respondents say they
have social media skills
to a great extent.
The war for talent
Could intensify around specialized skills.
88%
of surveyed respondents
plan to invest more
in risk capabilities in
next 2 years.
9%
say the risk function
has the resources it
needs even in specialized
areas like emerging risks.
Risk culture
Often exists in silos.
10%
of capital markets
respondents have a
strong organization-
wide risk culture.
24%
expect to have
reached this level of
maturity in 2 years'
time.
5
Data and analytics
Data accuracy and integrity is a critical priority.
38% of capital markets respondents
have data management skills
to a great extent.
9% say consistent updated
data is available
organization-wide.
8% say strategic decision-
making leverages risk-
based analytics tools.
45%
60%
of capital markets respondents to take on
additional risk around product development.
think market and business risks will become more
severe.
Cautious growth with risks on the horizon.
For more information, please visit: www.accenture.com/riskstudy2015
Source: Accenture 2015 Global Risk Management Study – Capital Markets respondents
© 2015 Accenture. All rights reserved.

61%
of risk masters
believe their risk
function can play
a critical role in
enabling
profitable growth.
54%
of risk masters
believe they can help
enable this growth
“to a great extent”.
35%
of non-masters
report
the same view.
Around 1 in 10 respondents to the
Accenture 2015 Global Risk
Management Study are “risk
masters”.
10%
61%
of risk masters agree
strongly that emerging
risks, such as cyber and
digital, are consuming a
greater proportion of the
CRO’s time.
35%
of non-risk
masters feel
strongly
about this.
61%
of risk masters agree
strongly that they
employ dedicated
technology specialists
to help manage digital
risk.
27%
of non-masters feel
the same.
Stronger focus on profitable growth
Stronger focus on emerging risks Growing digital experience
For more information, please visit: www.accenture.com/riskstudy2015
Source: Accenture 2015 Global Risk Management Study – all respondents
What makes a risk master?
© 2015 Accenture. All rights reserved.
Better handle on regulatory and compliance
More extensive use of analytics
37%
of risk masters
believe strongly that
regulatory change is
receding in relation to
other requirements.
25%
of non-risk
masters see
regulatory
change receding
in the same way.
36%
of non-masters
feel the same.
More risk masters make extensive use of analytics to manage key risk categories
including
fraud and financial crime, cyber and IT risk, and credit, market and regulatory
risks.
Risk masters are also more likely to be investing heavily in digital technologies.

5
Contents

Contents
A Our methodology
B Understanding the evolving environment
and context for risk management
1. Strengthen collaboration and integration between risk
management and finance
2. Effective operational risk management adding to future wave
of business growth
3. Invest in talent
4. Cultivate a consistent, resilient and integrated risk culture
5. Keep data at the top of the priority list
6. Accelerate adoption of analytics
C Bridging the gap

7
Our methodology
7Copyright © 2015 Accenture All rights reserved.

Introduction
4th iteration of our Global Risk
Management Study (2009, 2011, 2013)
2015 Global Risk Management Study:
Paths to Prosperity
For the 2015 study, we surveyed
470 CFOs, CROs, CEOs, CCOs,
CDOs involved in their
organization’s risk decisions
Our respondents came from North
America, Europe and the Asia
Pacific region
The survey focused on three
industry sectors: Capital Markets,
Banking and Insurance
In addition to the survey we conducted
50 qualitative client interviews

9
2015: Paths to Prosperity
Risk management continues to
make a crucial shift but choices
need to be made.
Seen as a collaborative partner to
enable business goals instead of
a controlling function to be
circumnavigated.

Demographics of Survey
Country Geography Regional target Respondents
Australia
Asia
Pacific
150
30
China 30
Hong Kong 30
Japan 30
Singapore 30
UK
Europe 170
50
Germany 30
France 30
Spain 30
Italy 30
USA North
America
150
100
Canada 50
Total 470 470
Company size Total
Between US$1bn and US$5bn 235
Revenues over US$5bn 235
Total 470
Respondent Total
Chief Risk Officer 141
Chief Executive Officer 78
Chief Financial Officer 147
Chief Compliance Officer 28
Chief Operations Officer 31
Chief Data Officer/CIO 45
Total 470
Sectors Sector count Asia Pacific Europe North America
Banking 150 50 50 50
Capital Markets 170 50 70 50
Insurance 150 50 50 50
Total 470 150 170 150
We surveyed 470 C-suite officers across all geographies and 12 countries.

11
Understanding the evolving environment
and context for risk management

Key Findings and Challenges
• 45% of capital markets respondents - greater appetite
for new product development risk
• Risk appetite greater for geographical expansion,
major digital initiatives and business model change for
respondents
• In our view, capital constraints and stiff competition are
key drivers for reshaping and pursuing defensive
growth efforts
Actions to Consider
• Incorporate risk at the strategic level to help identify
areas for reshaping and improving capital efficiency
and profitability
• Embed risk management’s perspective into building the
operating models that are aligned with new business
visions and strategies
• Understand the importance of current technology and
channel options to customers
Figure 1: Change in senior management’s appetite for risk
Section 1:
The new environment and context for risk management

Figure 2: The expected change in severity of risks facing the business over the
next two years
Section 1:
• Among capital markets respondents, severity of key
risks are expected to increase in the next two years
• Market, business, and cyber risks; disruption from new
technologies and operational risks are areas to be
monitored closely in our view
• Surveyed capital markets companies highlight the need
for greater preparedness to respond to a larger variety
of threats
Actions to Consider
• Build upon current surveillance and monitoring
capabilities, and enabling technologies for improved
awareness of risks
• Develop surveillance models based on organizational
culture rather than specific regulations
• Create availability of needed data and evolve from data
existing in silos
Increase
62%
61%
58%
56%
56%
56%
54%
51%
51%
51%
51%
49%
48%
48%
45%
44%

Section 1:
• Regulatory compliance - greatest focus for the risk
management function among capital markets
respondents
• 36% of respondents have risk functions that go beyond
regulatory compliance
• In our view, risk management is doing more to address
the drive for greater growth within a heighten risk
management environment
Actions to Consider
• Leverage output as well as business relationships from
compliance activities and incorporate risk perspective
in strategic planning and decision making
• Seek higher returns on investment in regulatory
compliance infrastructure and capabilities in areas with
higher risk appetite (e.g., new product development)
Figure 3: Senior management’s approach to delivering regulatory change programs

• Almost three-quarters of the institutions, where senior
management does go beyond regulatory compliance,
are keen to integrate with ongoing longer-term strategic
change initiatives according to capital markets
respondents
• Half the respondents reorganize their operating model
in pursuit of strategic business success
Actions to Consider
• Continue to evolve to a cohesive approach that thinks
holistically about business and regulatory outcomes,
rather than individual or point solutions for compliance
• Invest in streamlining or automating manual activities in
key risk areas (operational, credit) in order to increase
valuable and constrained time for strategic imperatives
Section 1:
Figure 4: How senior management goes beyond regulatory compliance

Section 1:
Figure 5: Statement that best describes the stage of maturity of the institution’s
risk-based decision-making
• In our view, achieving fully risk-based decision making
can be critical to the institution’s business
• In two years’ time, only 25% of capital markets
institutions surveyed expect to have moved to fully risk-
based decision-making, a 10 point increase from the
current level
Actions to Consider
• Build on the existing risk maturity of the organization,
and the relationships with the business to help align
with institution’s broader strategic planning
• Put CROs in strategic oversight roles to help connect
plans across the business – this can help reduce time
and effort wasted on projects that have to be scaled
back later in process
Risk management
primarily focused on
regulatory needs
/license to operate
Risk management
mainly focused on
regulatory
needs/license to
operate, but some
focus on broader
strategic risks
Fully risk-based
decision making with
strategic risk
management inputs
for major decision
Two years’ timeToday

Section 1:
Figure 6: Agreement with key statements
17
• Just 36% of capital markets respondents agree
strongly that business heads and the CRO jointly own
and manage risks in the organization
• 34% of respondents agree strongly that risk function
and business have consistent views of risks
• The challenge in our view, find the balance between
risk/reward and control/enablement
Actions to Consider
• Position risk management’s engagement as an
opportunity for independent challenge to new business
development
• Develop business case for strategic initiatives and
provide insight by using scenario analysis and other
forward looking analytical models to help enable
improved decision making
Slightly
agree
Strongly
agree
Disagree
slightly
Neither agree
nor disagree
Disagree
strongly
17%
8%
36%
39%
1%
25%
6%
28%
39%
1%
16%
4%
34%
46%
1%
19%
1%
45%
34%
1%
16%
4%
34%
45%
1%
16%
4%
34%
45%
1%
14
5%
29%
49%
3%
%

18
Bridging the gap

Bridging the gap
To cope with the rising pace of digital and competitive industry challenges, risk
management should focus on six key priorities:
Strengthen
collaboration
and
integration
between risk
management
and finance
Effective
operational
risk
management
adding to
future wave
of business
growth
Invest in
talent
Cultivate
a consistent,
resilient and
integrated
risk culture
Keep data at
the top of the
priority list
1 2 3 4 5 6
Accelerate
adoption of
analytics

• Coordination between finance and risk still has much
room to improve
• In our view, finance and risk functions face many of
the same challenges, ranging from operating models
that enable long-term growth, to reducing complexity
and duplication, to managing regulatory burdens
cost effectively
Actions to Consider
• Focus on solving the same challenges from distinct
and different perspectives - helps provide a balanced
point of view
• Strengthen ties between finance and risk on strategic
initiatives to drive the business toward an expansive
and strategic view
Priority 1:
Strengthen collaboration and integration between risk
Figure 7a: Statement that best describes the stage of maturity of the institution’s risk
and finance interactions
Finance and risk
leaders do not jointly
provide input into
corporate strategy
and ERM (Enterprise
Risk Management)
steering
Finance and risk
leaders have a close
working relationship,
but do not jointly
provide input into
corporate strategy
and ERM steering
Finance and risk
leaders may at times
be in opposition on
some issues, but
have a close working
relationship and both
provide input into
corporate strategy
and ERM steering

• While there are reasons for different data and models,
overall, model development and data usage are not
coordinated closely enough
• Increased focus on capital and liquidity issues implies
the rise of the role of treasury – this can create the
need for information to be shared between finance, risk
and treasury
Actions to Consider
• Drive integration around multiple areas, such as
day-to-day business decisions
• Look to coordinate consistent use of tools and
processes by moving beyond silos
• Develop flexible processes so roles can adapt with
agility to the evolving needs and circumstances of
business strategy and operating models
Priority 1:
Strengthen collaboration and integration between risk
Figure 7b and 7c: The extent to which risk management has contributed to the
organization achieving the following
Risk and capital
models are
developed largely
independently within
the risk and finance
functions
Risk and finance
coordinate closely on
the development of
risk and capital
models, but the
outputs of these
models do not drive
day-to-day business
decisions
Risk and finance
coordinate closely on
the development and
maintenance of risk and
capital models which
are used to drive day-
to-day business
decision making
Risk and finance
data are maintained
separately and other
resources and
capabilities (e.g.
modeling, IT) are
not used
Integration of risk and
finance data sources
is in progress, and
other organization
resources and
capabilities are
being considered
Risk and finance use
integrated data
sources, and other
organization
resources and
capabilities are used
to enhance efficiency

* “Survey: 71% of Companies Concerned Over Social Media Risks, But Only 36%
Provide Employee Training,” Marketing Land, September 27, 2013. Access at:
http://marketingland.com/survey-71-of-companies-concerned-about-social-media-risks-
only-36-do-social-media-training-60212
• 82% of capital markets respondents say that emerging
risks such as cyber and social media account for more
of the CRO’s time
• Increased focus on operational risks, particularly those
related to digital, big data and social media
• 71% of respondents are concerned with the risks of
social media*
Actions to Consider
• Apply digital technologies to help manage operational
risks, such as layering intra-day monitoring of key risk
indicators with mobile dashboards and smart
technology alerts
• Leverage surveillance technologies and capabilities to
monitor the reputational risks of social media – and
combine with efforts to develop formal risk assessment
plans
Priority 2:
Effective operational risk management adding to future wave
of business growth

• Less than one in 10 capital management respondents
have the internal resources needed, even in specialist
areas such as modeling and emerging risks
• War for talent should intensify as institutions struggle to
keep pace with the need for highly specialized skills
and expertise in the risk function
Actions to Consider
• Develop specialist teams to address emerging areas of
risk (cyber, digital, social media) head-on and learn by
monitoring and analyzing real-time data and alerts
• Embed risk framework in an integrated group-wide
platform for all employees to encourage discussions
on emerging risks – which can then be reviewed and
escalated
Priority 3:
Invest in talent
talent and capabilities
The risk team has
insufficient talent
resources to carry
out the functions it is
asked to perform
The risk team lacks
internal resources in
some specialized
areas (modeling,
emergency risks)
The risk team has
internal resources
even in specialized
areas (modeling,
emergency risks)

• Almost nine in 10 (88%) capital management
respondents say they plan to increase the level of
investment in risk management capabilities over the
next two years
• Since 2013, there has been significant increase in
investment – today only 10% report no change in
investment over a two year time horizon
Actions to Consider
• Consider recruiting specialist skills from non-traditional
recruiting pools, such as security specialists, strategic
planners and data analysts – and augmenting with risk
training
• Consider investing in digital technologies and analytics
- drive insight with fewer staff
• Invest in developing cross-functional skills among
existing risk personnel
Priority 3:
Invest in talent
Figure 9: The expected change to the total level of investment in risk management
capabilities in the next two years
20132015
0%
62%
36%
10%
0%
0%
62%
0%
2%
26%

• Compared to two years ago, the largest shifts in
recruiting among CM respondents is expected to be in
the cyber/fraud area
• Security experts remain high in demand
• Business analyst recruiting is expected to drop the
most in two years
Actions to Consider
• Acknowledge that the range of experience required by
modern risk functions continues to broaden – the war
for risk talent should shift in skillset
• Consider investing in agility as many talent
requirements are a result of the apparent need for
businesses to operate across functions and at
high speed
Priority 3:
Invest in talent
Figure 10: The types of expertise recruited in the past two years, and the skills to be
recruited in the next two years?
Past two years Next two years
39%
45%
42%
45%
31%
46%
57%
38%
52%
32%

• According to capital management respondents, risk
functions are equipped with solid business skills,
although there is much room for improvement
• Fewer than four in ten respondents say they have the
skills required to a great extent in areas including social
media, modeling, forecasting and data management.
Actions to Consider
• Consider developing skillsets in data management,
forecasting, modeling in-house
• Cultivate risk management’s profile within the
organization to help increase its attractiveness to
ambitious managers
• Develop cross-staffing opportunities to move risk
management people into the business and vice versa
To a great extent
Priority 3:
Invest in talent
Figure 11: The extent to which the risk management function has talent with the
following skills
61%
54%
42%
42%
40%
39%
38%
38%
37%
31%

• Capital markets respondents, much like banking and
insurance respondents, still lag in developing a robust
risk culture
• Just 10% of respondents say they have a strong and
consistent risk culture
• Even in two years’ time, fewer than one in four (24%)
expect to have reached this level of maturity
Actions to Consider
• Embed risk within the business as much as possible.
This may mean using programs such as cross-staffing
to integrate risk management individuals into the
business and vice versa
• Include risk-based approaches in strategic
decision-making
• Commit to break down siloes and increase enterprise
wide transparency
Today Next two years
Priority 4:
Cultivate a consistent, resilient and integrated risk culture
risk culture?
32%
10%
%
%
%
24
4
24
6%

Figure 13: The main obstacles to embedding a consistent, organization-wide
risk culture
Priority 4:
Cultivate a consistent, resilient and integrated risk culture
• Many significant challenges exist to creating a
consistent organization-wide risk culture
• Fundamental and industry specific structures are
major obstacles
• In addition, the human side of the equation – human
nature, preconceptions of acceptable front office
behavior – contribute to the other fundamental
obstacles
Actions to Consider
• Balance risk and reward – align risk management’s
goals with those of the wider business – for example
in compensation
• Improve communication about risk and connect it
to business teams throughout the organization by
working side-by-side
• Recognize that creating and maintaining a risk culture
is a continuous process
39%
32%
29%
28%
1%
36%
39%
23%

Figure 14: The extent to which challenges impede the overall effectiveness of the
organization's risk management function
Priority 5:
Keep data at the top of the priority list
• Capital markets respondents face numerous and
specific obstacles
• Key challenges include managing the increased
velocity, variety and volume of data as well as
balancing the need for local compliance as a global
institution
• Balancing the demand for being a control function
with a commercial mindset is difficult
Actions to Consider
• Consider a Chief Data Officer to help streamline
data gathering and use across the organization to
break down siloes
• Consider operating models that combine decentralized
and centralized approaches, based on specific
business objectives
• Leverage digital technologies to add insight and
perform manual and managerial tasks
To a great extent To some extent To a minimal extent No impact
26
6
30
38
14
8
27
51
26
5
28
40
20
7
35
38
29
8
26
36
29
6
21
45
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%

Figure 15: Whether the bank has a Chief Data Officer (CDO) with oversight of
risk/finance/customer related data and analytics
Priority 5:
• CDO is considered a key player by over three-quarters
of surveyed capital markets respondents
Actions to Consider
• Pursue the potential of data – not just as part of an
investigation into a problem, or as a regulatory
compliance function
• Employ data to develop prevention systems
• Enable a more forward-looking, predictive approach
77%
2
3
%

Figure 16: The skills and capabilities that will be most in demand by the risk
management function over the next two years
Priority 5:
• Results are in line with capital markets industry
trends observed, the increased velocity, variety and
volume of data point to requisite skills to manage
• Cyber risk understanding should become more
important, along with knowledge of digital technologies
• Business skills remain high in demand
Actions to Consider
• Expect tightness in the current market for
these skill sets
• Develop cross-skilling programs since the variety
and range of risk, digital and business skills is
difficult to find
• Invest in the retention and building of skills
38%
36%
34%
31%
29%
22%
21%
21%
18%
11%

Figure 17: Risk management‘s use of data and analytics to address the various
types of risk
Priority 5:
• Fewer than a third of capital markets survey
respondents currently make extensive use of analytics
tools as they attempt to address key risks
• Credit, regulatory, liquidity and market risks top the
list of using analytics to a great extent
• Legal risks and fraud/financial crime top the list for
analytics being used moderately
Actions to Consider
• Build upon the lessons learned and benefits of
analytics in key traditional risk areas – extend to
business, operational and strategic risks
• Recognize that overall industry use of advanced
analytics is widening
• Use analytics and insight to help inform business
decisions and build relationships
Extensive Moderate Limited Not yet
20
5
31
41
20
5
32
41
19
5
34
40
26
5
19
47
27
6
24
42
28
6
22
41
25
4
33
38
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%

risk analytics
Priority 6:
Accelerate adoption of analytics
• Less than 10% of capital management respondents
report that consistent, updated data is available to
decision makers across the organization on an ongoing
basis
• Even less report that analytics is integrated with
strategic planning and decision making
Actions to Consider
• Consider investing time, effort and funds to
standardize processes, systems and improving
controls to help deliver high quality data
Today Two years’ time
9%
26%
27%
9%
9%
30%
8%
26%

35
An evolving landscape

2005 2015V
S
Decisions informed by past events
Risk only outlook
Focused on credit, market and operational risk
Narrow definition of operational risk
Clear demarcation between three lines of defense
“Left brain” – quantitative; analytical approach
Prioritized control and prevention
Tactical attitude: centered on day-to-day risks
Spreadsheet-based management
Digital? What’s digital?
Looking forward, with “next day” thinking
Recognizing risk AND inherent opportunity
Aware of a growing range of emerging risks
More comprehensive definition of operational risk
Three lines of defense, with fluid interaction embedded in the business
“Left AND right brain” – creative, innovative understanding
A balance of control, prevention, and enablement
Strategic awareness: focused on long-term business challenges
Increasingly integrated data sources
Emphasis on digital risks and opportunities
The Risk Landscape
Risk management in 2025
Analytics now permeates decision
making
Companies are exploring robotics and
artificial intelligence to manage
transactional risks
Behavior prediction helps to effectively
inform risk management
Rise of the Chief Risk and Return
Officer
Risk management is the career path to
the C-suite
Single data source drives reporting and
analytics activities
For more information, please visit: www.accenture.com/riskstudy2015 © 2015 Accenture. All rights reserved.

37Copyright © 2015 Accenture All rights reserved. 37
Industry: Capital Markets
DISCLAIMER:
This presentation is intended for general informational purposes only and does not take into account the reader’s specific
circumstances, and may not reflect the most current developments. Accenture disclaims, to the fullest extent permitted by
applicable law, any and all liability for the accuracy and completeness of the information in this presentation and for any
acts or omissions made based on such information. Accenture does not provide legal, regulatory, audit, or tax
advice. Readers are responsible for obtaining such advice from their own legal counsel or other licensed professionals.
About Accenture
Accenture is a global management consulting, technology services and outsourcing company, with more than 323,000
people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across
all industries and business functions, and extensive research on the world’s most successful companies, Accenture
collaborates with clients to help them become high-performance businesses and governments. The company generated
net revenues of US$30.0 billion for the fiscal year ended Aug. 31, 2014. Its home page is www.accenture.com.
Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
2015 Global Risk Management Study

Accenture 2015 Global Risk Management Study: Capital Markets Key Findings and Insights

Recommandé

Recommandé

Contenu connexe

Tendances

Tendances (20)

En vedette

En vedette (11)

Similaire à Accenture 2015 Global Risk Management Study: Capital Markets Key Findings and Insights

Similaire à Accenture 2015 Global Risk Management Study: Capital Markets Key Findings and Insights (20)

Plus de accenture

Plus de accenture (20)

Dernier

Dernier (20)

Accenture 2015 Global Risk Management Study: Capital Markets Key Findings and Insights