Financial organisations rely on risk management systems to assess strategic, compliance and operational risks. However, according to a pre-COVID-19 survey of more than 800 audit committee and board members conducted by KPMG, the top challenge for companies is maintaining a highly effective risk management program, due to fast changing regulations and volatility in the business environment. Almost half of the survey respondents reported that their risk management program and processes still require substantial work.
Since this report was issued, the banking industry has been highly impacted by extraordinarily volatile market conditions and challenges concerning business continuity, market and credit risk as a result of COVID-19. The crisis has unveiled gaps in existing risk management frameworks in terms of their accuracy, effectiveness and agility. Banks are under pressure to deploy updated risk models and to be able to run calculations more frequently, and on more data, for more accurate and optimised risk management.