Not long ago I had the chance to present at RiskMinds International about new risk management challenges banks are wrestling with today. For example, data management is an increasing area of concern—with chief data officers springing up in leading financial enterprises. FinTech companies are also surfacing to help with a variety of analytics based challenges. Cyber financial crime is a growing concern.
Amidst this swirl of challenges is one that banks should not forget: return on investment for finance and risk spending. This issue is particularly concerning, because spending continues to be high and is projected to rise—but I would argue that the bulk of the money is being invested through approaches that are too tactical.
The industry is learning as it goes, and is building a better understanding of the data relationships and overlaps across the multiple inter-related regulatory requirements. But learning on the fly can only take us so far.
This video provides some food for thought around the funding and spending question, showing where spending is taking place today, and how, perhaps, we might shift the focus to get more return from the investments.
You might also want to view other snippets from my talk at RiskMinds, or view the presentation slides. My next post will talk about why financial businesses can’t “ride out the storm” when it comes to new risk management trends. Too much will be lost to those who wait on the sidelines.