A moving target: Refocusing risk and resiliency amidst continued uncertainty
Findings from the global risk management survey, 12th edition
The impact of COVID-19 on financial institutions, the economic downturn, and changes to working practices have had broad implications for risk management. How has risk management responded and where does it go from here?
In 2020, risk management at financial institutions faced challenges of a scale and scope not seen before as the world responded to a global health crisis caused by COVID-19. The measures taken by governments, businesses, and consumers to restrain the spread of the novel coronavirus triggered a sharp economic downturn and far-reaching social impacts.
COVID-19 has also had direct financial impacts on financial institutions. The economic contraction significantly increased credit risk from both retail and commercial customers, and many institutions responded by tightening credit standards. In addition, there may be greater potential for fraud such as from misuse of customer data, invoicing for work not completed, or collusion with disreputable third parties.
Deloitte’s 12th edition of the Global risk management survey was conducted from March through September 2020 during unprecedented times globally. When asked about the most important trends for their institutions over the next two years, the issues respondents named included global financial crisis (48%) and global pandemics (42%).