The future of risk in financial services

Article

The future of risk in financial services

Executive Summary

The future of risk management will likely look dramatically different than the current risk capabilities many are familiar with. Business units will have clear ownership of the risks that they take. Conduct and culture management will be pervasive throughout the organization. The role of the risk management function will also be clear, consisting of oversight and challenge. The risk function itself will be streamlined and much slimmer with a rationalized risk infrastructure. It will use location and delivery models for cost optimization and leverage the power of digital tools for both efficiency and effectiveness.

The digital tools will include cognitive agents scanning a wide range of signals in the internal and external environment to identify new risks, emerging threats, and potential bad actors. These digital tools could not only strengthen the risk function but also provide the business and strategic execution with additional insight. Big data analytics will be used to provide deeper insight into the interactions of risks and causal factors. Robotics and process optimization will restructure and automate processes; it will dramatically reduce operational risk and improve risk management quality, including the review of conduct and culture risks.

Automated risk triage will continuously take place to elevate the risk analysis for assessment and treatment in the event of more significant risk issues. Insofar as reports are needed to summarize the risk activity, natural language generation techniques will be applied to prepare draft reports, with risk analysts only required to perform reviews and selected input tasks.

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Inside Magazine Risk Global edition, February 2018

Inside is Deloitte’s quarterly magazine offering an exclusive insight into best practices, trends and opportunities faced by our clients across all industries.

Inside focuses on the main hot topics relevant for the market (Asset management, Banking, Insurance, Public sector, Healthcare, Private equity, Real estate, TMT, Manufacturing and consumer business, Transport and logistics).

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