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UK BANKING
& CAPITAL
MARKETS
Accenture 2017 Global
Risk Management Study:
U.K. Banking & Capital Markets Supplement
Risk Potential Exposed
This presentation is a supplement to the Global Risk
Management Study Banking and Global Capital
Markets reports and summary presentations. It
presents data based on answers from the study’s
U.K. based banking and capital markets
respondents. (Base: 50)
We strongly recommend reviewing the Global Risk
Management Study Banking and Capital Markets
presentations together with this supplement.
Download the full Global Risk Management
Study reports and presentations from here:
www.accenture.com/RiskStudyBanking
www.accenture.com/RiskStudyCapitalMarkets
Copyright © 2017 Accenture. All rights reserved. 2
INTRODUCTION
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
RISK STUDY HERITAGE:
TREND WATCHING
Copyright © 2017 Accenture. All rights reserved. 3
BEGINNING
MATURITY
CRISIS
MANAGEMENT
THE RISE
OF DIGITAL
COLLABORATION
PARTNER
DISCIPLINED,
INTEGRATED,
CONNECTED
2009 2011 2013 2015 2017
Since 2009, Accenture has conducted regular in-depth research on risk management.
Over time, the risk function has evolved—from crisis management in 2009 to today’s more
integrated, fluid and maturing discipline.
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
2017 GLOBAL RISK MANAGEMENT STUDY
Copyright © 2017 Accenture. All rights reserved. 4
WE SURVEYED 50 BANKING & CAPITAL MARKETS
RESPONDENTS BASED IN THE U.K.
BANKING
INSURANCE
CAPITAL MARKETS
The Accenture 2017 Global Risk Management Study is the fifth edition of our study.
CFOs, CROs, CEOs, CCOs, CDOs
who are involved in their
organisation’s risk decisions.
COMPANY SIZE
50% with global revenues or income
between US $1bn & $5bn, 50% with
revenues over US $5bn.
SURVEYED 475
each from Europe, North America,
Americas and Asia-Pacific.
This includes key markets such as
Canada, U.S., Germany, France, Italy,
Spain, U.K., Australia and Japan to
enable analysis at country level.
100 TO 200 RESPONSES FOCUSED ON THREE
INDUSTRY SECTORS:
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
TOP CHALLENGES FACING THE U.K. BANKING AND
CAPITAL MARKETS RISK MANAGEMENT FUNCTION
U.K. banking and capital markets
organisations face a number of
challenges that impede the
effectiveness of the risk management
function.
• The top challenges are increasing
demands from regulators (84
percent), increased velocity, variety
and volume of data (82 percent),
and legacy technologies in the risk
function (82 percent).
Copyright © 2017 Accenture. All rights reserved.
To what extent do the following challenges impede the overall effectiveness of your risk management function? [To a great extent/to some
extent] (Base: 50 – U.K. banking and capital markets)
U.K. U.S. Japan Total
Increasing demand from multiple regulators in multiple
jurisdictions 84% 81% 61% 74%
Increased velocity, variety and volume of data 82% 70% 67% 71%
Legacy technologies within the risk function 82% 66% 55% 69%
Balancing the responsibilities for controls and compliance
with the need for effective customer service 80% 63% 63% 69%
Lack of budget to make necessary investments 78% 63% 61% 70%
Increasing demands from senior management and the
board 78% 70% 61% 67%
Shortage of core risk management talent and skills 76% 67% 65% 67%
Lack of integration across existing technology
infrastructure 74% 61% 51% 66%
Lack of integration with other business functions 72% 65% 55% 62%
Shortage of skills in new and emerging technologies 72% 61% 69% 68%
Disruption of business models from digital technologies 70% 61% 59% 67%
Lack of clear governance in decision-making processes 70% 59% 47% 60%
Our 2017 Global Risk Management
Study finds U.K. based banking
and capital markets organisations
striving to keep pace with a fast-
changing and volatile market
environment. While internal and
external forces are testing their risk
management capabilities.
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
THE PATH FOR RISK MANAGEMENT
Copyright © 2017 Accenture. All rights reserved. 6
Banks and capital markets firms, including those surveyed in the U.K., are responding to these
challenges by taking a more fluid, progressive approach to risk management, investing to strengthen
their risk functions across three key areas:
1. HARNESSING
SMART
TECHNOLOGY
2. RISING TO MEET
COORDINATION
CHALLENGES
3. BUILDING
NEW LAYERS
OF TALENT
New technologies can
lower costs, but also
boost accuracy and
agility, bringing better
insights
A common data platform
provides a single version
of the truth
Financial firms are
investing significantly
in risk capabilities
and headcount
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
KEY
FINDINGS
SUMMARY
Copyright © 2017 Accenture. All rights reserved. 7
The summary slides (8 to 13) present a snapshot
of the key stats and a closer look at the findings
supporting the three focus areas of the Global Risk
Management Study: technology, integration and
talent.
Slide 14 presents recommended steps risk leaders
can take to help generate greater business value
from opportunities revealed by the study.
Detailed findings and U.K. specific survey data are
covered in the next sections.
Copyright © 2017 Accenture. All rights reserved.
8
HARNESSING SMART TECHNOLOGIES:
A SNAPSHOT
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
U.K. banks and
capital markets firms
are investing in new
technologies to
enhance efficiency
and improve risk
outcomes.
HARNESSING SMART TECHNOLOGIES:
A CLOSER LOOK
Copyright © 2017 Accenture. All rights reserved. 9
U.K. banking and capital markets organisations are building their technology capabilities for
transformation, greater efficiency and lower costs, and to better respond to regulators.
• These organisations are facing a number of technology challenges that impede risk management effectiveness,
with the most negative impacts from increased variety and volume of data (82 percent) and legacy technologies within
the risk function (82 percent). Nearly two-thirds (62 percent) also agree that they should upgrade systems and
capabilities to provide more transparent reporting to regulators. Reference: slide 16
• Innovation is changing the way the risk function operates: a broad range of technologies is being used to
support risk management. While overall usage is high, however, risk teams are not fully exploiting these technologies
– particularly the newer ones: 90 percent are using the cloud to some extent, but only 12 percent say they are highly
proficient in its use; 88 percent are using big data and analytics overall, but just 8 percent describe themselves as highly
proficient. Reference: slide 17
• Adopting new technologies has the potential to provide a number of important benefits to risk functions.
Increased efficiency and productivity is identified as the top benefit from use of both big data and artificial intelligence
(AI), and as an important benefit in the use of the cloud. The key benefit from adopting the cloud is expected to be
enhanced customer service. Reference: slide 18
• U.K. banking and capital markets organisations’ risk functions are also using a number of technology
applications to address cost pressures. Nine in ten (90 percent) are using big data and analytics to address cost
pressures, while 72 percent are using the cloud for that purpose. Reference: slide 19
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
Copyright © 2017 Accenture. All rights reserved. 10
RISING TO MEET COORDINATION CHALLENGES:
A SNAPSHOT
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
U.K. banks and capital markets firms are continually striving to embed coordination and achieve
a balanced approach to risk across the business, but there is much to be done:
RISING TO MEET COORDINATION CHALLENGES:
A CLOSER LOOK
Copyright © 2017 Accenture. All rights reserved. 11
The risk function is striving to become more centralised and coordinated in order to enhance data
management, analysis, decision-making and reporting.
• U.K. banking and capital markets organisations are moving toward a more centralised approach to risk
management over the next two years. Nearly half (48 percent) anticipate centralised coordination across risk types over
the next two years (up from 20 percent today); 40 percent expect to centralise coordination across business lines (up from
14 percent today). Reference: slide 21
• U.K. respondents see room for improvement across all aspects of risk function organisation. More than half (56
percent) say there is duplication of risk management activities across lines of business, and 50 percent say local markets
struggle to balance local and organisation-wide risk priorities. Reference: slide 22
• Seven in ten U.K. banking and capital markets respondents (72 percent) see lack of integration with other
functions as a key barrier to risk effectiveness, and are planning better integration of risk and finance processes to
address this. While only 6 percent say finance and risk currently have a close working relationship and provide input into
corporate strategy and enterprise risk management (ERM) steering, 30 percent believe this will be the case in two years’
time. Reference: slide 23
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
Copyright © 2017 Accenture. All rights reserved. 12
BUILDING NEW LAYERS OF TALENT:
A SNAPSHOT
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
Risk teams in U.S.
banks and capital
markets firms are
investing in skills
to exploit new
tools, business
models and
technology—and
address their gaps
in capability.
Key skill priorities in the year ahead Teams should keep evolving But progress is underway
BUILDING NEW LAYERS OF TALENT:
A CLOSER LOOK
Copyright © 2017 Accenture. All rights reserved. 13
U.K. banking and capital markets organisations are looking to create risk teams that blend core competencies,
commercial acumen and a deep understanding of new digital capabilities. This skills mix reflects the growing remit
of the risk function and the rapidly increasing importance of new technologies.
• U.K. respondents recognise the recent achievements of their risk teams in building a range of capabilities. More
than eight in ten respondents (84 percent) say the risk workforce has an effective understanding of the business impact of
regulatory changes and of emerging technology risks. Risk teams are seen as less effective at understanding social media
(72 percent). Reference: slide 25
• Risk functions are building their teams against a background of skills shortages. These shortages affect U.K.
organisations to a greater degree than in the U.S., Japan and globally. Three-quarters (76 percent) of respondents say a
shortage of core risk management talent and skills is impeding effectiveness of the function; 72 percent say a shortage of
skills in new and emerging technologies is impeding its effectiveness. Reference: slide 26
• U.K. banking and capital markets organisations are prioritising technical risk management skills over the next
year. Nearly half (48 percent) plan to strengthen their understanding of emerging technology risks, and 40 percent plan to
strengthen their data management capabilities. Reference: slide 27
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
SIX SIMPLE BUT POWERFUL ACTIONS
TO TAKE NOW
Copyright © 2017 Accenture. All rights reserved. 14
Data-driven technologies speed up
operations and improve everything from
measurement to anomaly detection.
But many firms still need to work on the
fundamentals of their IT infrastructure and
build internal skills.
MITIGATE RISK BY
INCREASING DIGITAL
AND TECHNOLOGICAL
INNOVATION
Risk management should strive for
greater integration with the CEO and
board on strategic decision-making,
offering them a clear view of financial,
non-financial and emerging risks.
There is an opportunity for a more open data-
driven dialogue between regulators and
financial organisations. Risk managers should
be proactive in identifying regulatory concerns
and initiating conversations – backed by
traceable data.
INTRODUCE “SKILLS
BLENDING” IN RISK TEAMS TO
ENCOURAGE INNOVATION
Risk management needs a team of people with
creativity, technology acumen and industry
knowledge as well as quantitative and analytical
skills. This can lead to more innovative solutions,
essential in today’s ever-changing
environment.
MAKE THE MOST OF
ANALYTICS BY PUSHING
RISK TEAMS BEYOND
DATA MANAGEMENT
Risk talent should perform information
analysis, while automation and supporting
professionals manage data quality,
integrity, integration and technical issues.
This helps capture the full analytical value
of professional risk practitioners.
The risk function should strive to be
more commercially aware. For most,
this will mean evolving beyond being
simply a “control function” and toward
being a transformation leader and joint
architect of new business models.
1
6
2
INCREASE TRANSPARENCY
AND REDUCE THE REPORTING
BURDEN THROUGH A DATA-
DRIVEN RELATIONSHIP WITH
REGULATORS
3
DEMONSTRATE COMMERCIAL
AWARENESS BY LEADING THE
WAY ON BUSINESS AND
INDUSTRY TRANSFORMATION
5
INCREASE COORDINATION
OF RISK MANAGEMENT
WITH OTHER BUSINESS
FUNCTIONS
4
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
SURVEY DATA &
RESULTS:
1. HARNESSING
SMART
TECHNOLOGIES
Copyright © 2017 Accenture. All rights reserved. 15
RANGE OF TECHNOLOGY CHALLENGES
AFFECTING THE RISK FUNCTION
• 82 percent in the U.K. see
increased data demands as
a key challenge (U.S. 70
percent; Japan 67 percent;
total 71 percent).
• 82 percent see legacy
technologies as a critical
concern (U.S. 66 percent,
Japan 55 percent; total 69
percent).
Copyright © 2017 Accenture. All rights reserved.
16
To what extent do the following challenges impede the overall effectiveness of your risk management function? [To a great extent/to some extent]
(Base: 50 – U.K. banking and capital markets)
42%
32%
38%
22%
20%
40%
50%
34%
50%
50%
18%
14%
18%
20%
12%
2%
10%
6%
14% 4%
Increased velocity, variety
and volume of data
Legacy technologies within
the risk function
Shortage of skills in new and
emerging technologies
Lack of integration across
existing technology
infrastructure
Disruption of business
models from digital
technologies
To a great extent To some extent To a minimal extent No impact Don't know
Respondents identified a
number of technology
challenges that impede the
effectiveness of the risk
function. The increased
velocity, variety and volume
of data, and legacy
technologies, have the
greatest impact.
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
SMART TECHNOLOGIES:
FULL POTENTIAL UNTAPPED
• 90 percent in the U.K. are
using the cloud to some extent,
but only 12 percent are highly
proficient in using it (U.S. 37
percent; Japan 14 percent;
total 21 percent).
• 88 percent are using big data
and analytics overall, but only
8 percent see themselves as
highly proficient (U.S. 30
percent; Japan 12 percent;
total 19 percent).
Copyright © 2017 Accenture. All rights reserved.
17
Thinking about the range
of technologies that you
use to support your risk
management function,
how advanced is your
institution’s use of the
following technologies?
(Base: 50 – U.K. banking
and capital markets)
12%
12%
8%
22%
12%
8%
44%
36%
38%
24%
22%
20%
34%
30%
42%
36%
42%
54%
8%
20%
12%
14%
20%
16%
Cloud
Artificial intelligence
Big data and
analytics
Collaboration and
workflow tools
Machine learning
Robotic process
automation
We are highly proficient in using this technology
We use the technology for our risk function but we’re not extracting the full potential
Starting to use to some extent
Not using it but see the potential
Not using it and do not see the potential
A full range of technologies
are being used to support the
risk management function.
Although usage is high, risk
teams are not yet using them
to their full potential—
particularly the more
advanced technologies.
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
SMART TECHNOLOGIES STRATEGY:
BENEFITS & OPPORTUNITIES TO COME
Copyright © 2017 Accenture. All rights reserved.
18
What do you see as the biggest opportunities for your organisation with adopting the cloud? …in applying analytics to big data? …in the use of
artificial intelligence and machine learning? (Base: 45, 5, 34 – U.K. banking and capital markets)
Improvements from applying
analytics to big data
U.K. U.S. Japan Total
Efficiency/
productivity
38% 31% 10% 31%
Risk analysis and
risk insight
29% 28% 40% 30%
Ability to
collaborate with
external partners
29% 17% 25% 24%
Business scalability 24% 38% 20% 24%
Accuracy and
control
24% 28% 20% 26%
Customer service 21% 14% 30% 21%
Regulatory data
management
18% 31% 20% 28%
Compliance 18% 21% 25% 21%
Ability to combat
financial crime
18% 17% 15% 19%
Product profitability/
rationalisation
12% 28% 10% 20%
• Largely driven by retail banks,
36% in the U.K. see the main
benefit of the cloud as better
customer service (U.S. 18
percent; Japan 29 percent;
total 27 percent).
• While adoption of AI and
machine learning is low, U.K.
banks and capital markets
firms still see opportunities for
use across multiple areas, with
improved efficiency to the fore.
• Improved efficiency is an
important benefit of applying
analytics to big data.
Improvements from adopting the
cloud
U.K. U.S. Japan Total
Customer service 36% 18% 29% 27%
Efficiency/
productivity
33% 35% 26% 34%
Compliance 29% 20% 21% 25%
Risk analysis and
risk insight
29% 18% 29% 28%
Accuracy and
control
27% 29% 21% 22%
Regulatory data
management
24% 43% 16% 24%
Ability to collaborate
with external
partners
20% 25% 18% 21%
Product profitability/
rationalisation
16% 25% 24% 24%
Business scalability 16% 24% 29% 23%
Ability to combat
financial crime
16% 22% 21% 16%
Improvements from use of AI and
machine learning
U.K. U.S. Japan Total
Efficiency/
productivity
40% 27% 43% 32%
Business
scalability
40% 27% 29% 32%
Accuracy and
control
40% 9% 57% 32%
Compliance 40% 9% 0% 13%
Customer service 20% 45% 0% 37%
Regulatory data
management
20% 45% 14% 24%
Risk analysis and
risk insight
20% 36% 86% 55%
Ability to collaborate
with external
partners
0% 27% 14% 11%
Ability to combat
financial crime
0% 27% 14% 18%
Product profitability/
rationalisation
0% 27% 14% 21%
U.K. banking and capital
markets respondents believe
that continued investment in
smart technologies can help
increase efficiency,
productivity and improve
customer service.
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
ADDRESSING COST PRESSURES:
BIG DATA AND ANALYTICS ARE CRUCIAL
U.K. banking and capital
markets firms are using a
range of technologies as
part of a wider strategy to
ease cost pressures.
• 90 percent in the U.K. are
using big data and analytics to
address such concerns (U.S.
87 percent; Japan 86 percent;
total 83 percent).
• 72 percent are using the cloud
for this purpose (U.S. 72
percent; Japan 75 percent;
total also 74 percent).
• 72 percent are using artificial
intelligence to better respond
to cost pressures. This is more
than in the U.S. (65 percent),
Japan (55 percent) and
globally (67 percent).
Copyright © 2017 Accenture. All rights reserved. 19
To what extent are the following technologies enabling your risk function to address the cost pressures you
are facing? (Base: 50 – U.K. banking and capital markets)
38%
32%
14%
16%
26%
10%
52%
40%
58%
54%
42%
46%
10%
22%
18%
22%
24%
32%
6%
10%
8%
8%
12%
Big data and analytics
Cloud
Artificial intelligence
Collaboration and workflow
tools
Machine learning
Robotic process automation
To a great extent To some extent To a minimal extent No impact
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
SURVEY DATA &
RESULTS
2. RISING TO
MEET
COORDINATION
CHALLENGES
Copyright © 2017 Accenture. All rights reserved. 20
RISK MANAGEMENT COORDINATION:
TREND IS MOVING TOWARDS CENTRALISATION
The study shows that
currently there is a
decentralised operating
model, but a high proportion
of U.K. banking and capital
markets respondents are
striving for more
centralisation.
Copyright © 2017 Accenture. All rights reserved. 21
Using scores between 1 and 5, please indicate how risk management activities are currently coordinated across risk type, and how you expect them to
be coordinated in two years’ time. Using scores between 1 and 5, please indicate how risk management activities are currently coordinated across
specific lines of business, and how you expect them to be coordinated across specific lines of business in two years’ time.
(Base: 50 – U.K. banking and capital markets)
RISK COORDINATION ACROSS
RISK TYPES (e.g. market risk, credit
risk, liquidity)
RISK COORDINATION ACROSS
LINES OF BUSINESS
28%
24%
48%
38%
42%
20%
Decentralised - risk
management operates
at a regional level
Risk management
operates equally at
both a group and
regional level
Centralised - risk
management operates
at a group level
In two years' time
Now
22%
38%
40%
52%
34%
14%
Decentralised - risk
management operates
at a regional level
Risk management
operates equally at
both a group and
regional level
Centralised - risk
management operates
at a group level
In two years' time
Now
• 48 percent in the U.K.
expect centralised
coordination across risk
types over the next two
years, up from
20 percent today.
• 40 percent anticipate
centralised coordination
across business lines over
the next two years, up from
14 percent today.
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
THE INTEGRATION CHALLENGE:
A COMMON VIEW OF RISK INFORMATION
U.K. banking and capital
markets respondents see room
for improvement across all
aspects of the risk function
organisation.
22
Thinking of your risk management function, to what extent do you agree or disagree with the following statements? Over the next two years,
what changes do you expect to your use of outsourcing for the following risk processes? [Strongly agree/agree] (Base: 50 – U.K. banking
and capital markets)
12%
8%
16%
6%
44%
42%
32%
32%
34%
38%
32%
46%
10%
10%
18%
10%
There is duplication of effort in
risk management activities
across lines of business
Local markets struggle to
balance management of risk at
the local level with
organisation-wide risk priorities
There is limited coordination
between risk management
activities at the local level and
at the group level
Organisation-wide risk
processes do not capture the
nuances of local markets
Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree
Copyright © 2017 Accenture. All rights reserved.
• 56 percent in the U.K. say there
is duplication of risk management
activities across lines of business
(U.S. 55 percent; Japan 47
percent; total 54 percent).
• 50 percent say local markets
struggle to balance the
management of risk at the local
level with organisation-wide risk
priorities (U.S. 57 percent; Japan
47 percent; total 57 percent).
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
RISK AND FINANCE INTEGRATION:
CLOSER ALIGNMENT ANTICIPATED
Our study found seven in ten U.K.
banking and capital markets
respondents (72 percent) see lack of
integration with other functions as a
key barrier to risk effectiveness. They
are planning better integration of
risk and finance processes to address
this challenge.
Copyright © 2017 Accenture. All rights reserved. 23
Please indicate how your risk function currently performs in regard to finance and risk integration, using scores between 1 and 5 (where 1 is limited
integration and 5 is full integration). [Aggregate 4/5 ratings] (Base: 50 – U.K. banking and capital markets)
6%
52%
42%
Now
• Finance and risk are working closely
in a small minority of companies
today: only 6 percent in the U.K. say
they both provide input into corporate
strategy and ERM steering (U.S. 37
percent; Japan 24 percent; total 25
percent).
• 30 percent believe this will be the
case in two years’ time (U.S. 52
percent, Japan 43 percent; total 45
percent).
30%
34%
36%
In two years' time
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
SURVEY DATA &
RESULTS
3. BUILDING
NEW LAYERS OF
TALENT
Copyright © 2017 Accenture. All rights reserved. 24
RISK MANAGEMENT WORKFORCE:
BUILDING A FULL RANGE OF CAPABILITIES
U.K. based banking and capital
markets respondents recognise the
recent achievements of their risk
teams in building a range of
capabilities, but less so in emerging
technology risks such as social
media.
• 84 percent in the U.K. say the risk
workforce is effective in
understanding the business impact
of regulatory changes (U.S. 83
percent; Japan 71 percent; total 77
percent).
• 84 percent say they have an
effective understanding of emerging
technology risks (U.S. 78 percent;
Japan 61 percent; total 77 percent).
• Risk teams are seen as less
effective in their understanding of
social media (72 percent against
U.S. 78 percent; Japan 67 percent;
total 72 percent).
Copyright © 2017 Accenture. All rights reserved. 25
Thinking of your risk management workforce capabilities, how effective are they across the following areas? [Very effective/effective] To what
extent do you agree or disagree with the following statements? [Strongly agree/agree] (Base: 50 – U.K. banking and capital markets)
84%
84%
82%
80%
80%
80%
78%
72%
Understanding business impact
of regulatory changes
Understanding of emerging
technology risks
Understanding of key sector
trends
Ability to apply analytics to risk
management
Performing risk control activities
Commercial awareness
Data management
Understanding of social media
Reporting cyber
risk
• 62 percent agree
that they have a
cyber risk
management
function that can
effectively
challenge the IT
function and
accurately report
the real status of
cyber risk to the
board (U.S. 78%;
Japan 69%; total
69%).
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
TALENT CHALLENGES REMAIN:
SKILLS SHORTAGES IMPEDES THE RISK FUNCTION
While U.K. banking and capital
markets respondents believe their
risk management capabilities are
effective across the board, skills
shortages were still identified as
one of the challenges impacting
effectiveness of the risk function.
• Three-quarters (76 percent) of
respondents in the U.K. say a
shortage of core risk management
talent and skills is impeding
effectiveness of the function (U.S.
67 percent; Japan, 65 percent; total
67 percent).
• 72 percent say a shortage of skills
in new and emerging technologies
is impeding the function’s
effectiveness (U.S. 61 percent;
Japan 69 percent; total 68
percent).
Copyright © 2017 Accenture. All rights reserved. 26
To what extent do the following challenges impede the overall effectiveness of your risk management function? [To a great extent/to some
extent] (Base: 50 – U.K. banking and capital markets)
28%
38%
48%
34%
14%
18%
8%
10%
Shortage of core risk
management talent and
skills
Shortage of skills in new
and emerging
technologies
To a great extent To some extent To a minimal extent No impact Don't know
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
Copyright © 2017 Accenture. All rights reserved. 27
What are the priority risk management capabilities your institution plans to strengthen
over the next year? (Base: 50 – U.K. banking and capital markets)
• 48 percent in the U.K. plan to
strengthen understanding of
emerging technology risks (U.S.
48 percent; Japan 49 percent; total
48 percent).
• 40 percent plan to strengthen data
management (U.S. 50 percent
Japan 49 percent; total 45 percent).
BUILDING RISK CAPABILITIES:
EVOLVING SKILL SETS
48%
40%
32%
30%
28%
26%
Understanding of emerging technology risks
Data management
Advanced mathematical and statistical
knowledge
Understanding of key trends in our sector
Broader commercial awareness
Managing reputational risk associated with
social media
Increasing stakeholder demands and
emerging risk types require risk
teams to add new skills to traditional
risk management experience.
U.K. banking and capital markets
respondents are prioritising
technical risk management skills
over the next year, with an emphasis
on understanding emerging
technology risks and data
management.
Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
DOWNLOAD OUR
BANKING AND CAPITAL
MARKETS REPORTS NOW
RISK FUNCTION’S
FUTURE SUCCESS
Or contact:
Peter Beardshaw (Banking): peter.beardshaw@accenture.com
Ashley Davies (Cap Markets): ashley.davies@accenture.com
Mark Wheaton (Cap Markets): mark.wheaton@accenture.com
Visit:
www.accenture.com/RiskStudyBanking
www.accenture.com/RiskStudyCapitalMarkets
Today more than ever, modern banks and
investment firms need a risk function that goes
far beyond compliance to become an integrated,
strategic cog in the primary gears of the business.
ABOUT ACCENTURE
Accenture is a leading global professional services company,
providing a broad range of services and solutions in strategy,
consulting, digital, technology and operations. Combining
unmatched experience and specialized skills across more than
40 industries and all business functions—underpinned by the
world’s largest delivery network —Accenture works at the
intersection of business and technology to help clients
improve their performance and create sustainable value for
their stakeholders. With more than 425,000 people serving
clients in more than 120 countries, Accenture drives
innovation to improve the way the world works and lives. Visit
us at www.accenture.com
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.
Accenture, its logo, and High Performance Delivered are trademarks of Accenture.
Copyright © 2017 Accenture. All rights reserved.
EXPOSED:
THE HIDDEN VALUE OF RISK IN
BANKING & CAPITAL MARKETS
ACCENTURE 2017 GLOBAL RISK
MANAGEMENT STUDY

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Accenture 2017 Global Risk Study: UK Banking & Capital Markets Supplement

  • 1. UK BANKING & CAPITAL MARKETS Accenture 2017 Global Risk Management Study: U.K. Banking & Capital Markets Supplement Risk Potential Exposed
  • 2. This presentation is a supplement to the Global Risk Management Study Banking and Global Capital Markets reports and summary presentations. It presents data based on answers from the study’s U.K. based banking and capital markets respondents. (Base: 50) We strongly recommend reviewing the Global Risk Management Study Banking and Capital Markets presentations together with this supplement. Download the full Global Risk Management Study reports and presentations from here: www.accenture.com/RiskStudyBanking www.accenture.com/RiskStudyCapitalMarkets Copyright © 2017 Accenture. All rights reserved. 2 INTRODUCTION Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
  • 3. RISK STUDY HERITAGE: TREND WATCHING Copyright © 2017 Accenture. All rights reserved. 3 BEGINNING MATURITY CRISIS MANAGEMENT THE RISE OF DIGITAL COLLABORATION PARTNER DISCIPLINED, INTEGRATED, CONNECTED 2009 2011 2013 2015 2017 Since 2009, Accenture has conducted regular in-depth research on risk management. Over time, the risk function has evolved—from crisis management in 2009 to today’s more integrated, fluid and maturing discipline. Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
  • 4. 2017 GLOBAL RISK MANAGEMENT STUDY Copyright © 2017 Accenture. All rights reserved. 4 WE SURVEYED 50 BANKING & CAPITAL MARKETS RESPONDENTS BASED IN THE U.K. BANKING INSURANCE CAPITAL MARKETS The Accenture 2017 Global Risk Management Study is the fifth edition of our study. CFOs, CROs, CEOs, CCOs, CDOs who are involved in their organisation’s risk decisions. COMPANY SIZE 50% with global revenues or income between US $1bn & $5bn, 50% with revenues over US $5bn. SURVEYED 475 each from Europe, North America, Americas and Asia-Pacific. This includes key markets such as Canada, U.S., Germany, France, Italy, Spain, U.K., Australia and Japan to enable analysis at country level. 100 TO 200 RESPONSES FOCUSED ON THREE INDUSTRY SECTORS: Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
  • 5. TOP CHALLENGES FACING THE U.K. BANKING AND CAPITAL MARKETS RISK MANAGEMENT FUNCTION U.K. banking and capital markets organisations face a number of challenges that impede the effectiveness of the risk management function. • The top challenges are increasing demands from regulators (84 percent), increased velocity, variety and volume of data (82 percent), and legacy technologies in the risk function (82 percent). Copyright © 2017 Accenture. All rights reserved. To what extent do the following challenges impede the overall effectiveness of your risk management function? [To a great extent/to some extent] (Base: 50 – U.K. banking and capital markets) U.K. U.S. Japan Total Increasing demand from multiple regulators in multiple jurisdictions 84% 81% 61% 74% Increased velocity, variety and volume of data 82% 70% 67% 71% Legacy technologies within the risk function 82% 66% 55% 69% Balancing the responsibilities for controls and compliance with the need for effective customer service 80% 63% 63% 69% Lack of budget to make necessary investments 78% 63% 61% 70% Increasing demands from senior management and the board 78% 70% 61% 67% Shortage of core risk management talent and skills 76% 67% 65% 67% Lack of integration across existing technology infrastructure 74% 61% 51% 66% Lack of integration with other business functions 72% 65% 55% 62% Shortage of skills in new and emerging technologies 72% 61% 69% 68% Disruption of business models from digital technologies 70% 61% 59% 67% Lack of clear governance in decision-making processes 70% 59% 47% 60% Our 2017 Global Risk Management Study finds U.K. based banking and capital markets organisations striving to keep pace with a fast- changing and volatile market environment. While internal and external forces are testing their risk management capabilities. Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
  • 6. THE PATH FOR RISK MANAGEMENT Copyright © 2017 Accenture. All rights reserved. 6 Banks and capital markets firms, including those surveyed in the U.K., are responding to these challenges by taking a more fluid, progressive approach to risk management, investing to strengthen their risk functions across three key areas: 1. HARNESSING SMART TECHNOLOGY 2. RISING TO MEET COORDINATION CHALLENGES 3. BUILDING NEW LAYERS OF TALENT New technologies can lower costs, but also boost accuracy and agility, bringing better insights A common data platform provides a single version of the truth Financial firms are investing significantly in risk capabilities and headcount Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
  • 7. KEY FINDINGS SUMMARY Copyright © 2017 Accenture. All rights reserved. 7 The summary slides (8 to 13) present a snapshot of the key stats and a closer look at the findings supporting the three focus areas of the Global Risk Management Study: technology, integration and talent. Slide 14 presents recommended steps risk leaders can take to help generate greater business value from opportunities revealed by the study. Detailed findings and U.K. specific survey data are covered in the next sections.
  • 8. Copyright © 2017 Accenture. All rights reserved. 8 HARNESSING SMART TECHNOLOGIES: A SNAPSHOT Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports U.K. banks and capital markets firms are investing in new technologies to enhance efficiency and improve risk outcomes.
  • 9. HARNESSING SMART TECHNOLOGIES: A CLOSER LOOK Copyright © 2017 Accenture. All rights reserved. 9 U.K. banking and capital markets organisations are building their technology capabilities for transformation, greater efficiency and lower costs, and to better respond to regulators. • These organisations are facing a number of technology challenges that impede risk management effectiveness, with the most negative impacts from increased variety and volume of data (82 percent) and legacy technologies within the risk function (82 percent). Nearly two-thirds (62 percent) also agree that they should upgrade systems and capabilities to provide more transparent reporting to regulators. Reference: slide 16 • Innovation is changing the way the risk function operates: a broad range of technologies is being used to support risk management. While overall usage is high, however, risk teams are not fully exploiting these technologies – particularly the newer ones: 90 percent are using the cloud to some extent, but only 12 percent say they are highly proficient in its use; 88 percent are using big data and analytics overall, but just 8 percent describe themselves as highly proficient. Reference: slide 17 • Adopting new technologies has the potential to provide a number of important benefits to risk functions. Increased efficiency and productivity is identified as the top benefit from use of both big data and artificial intelligence (AI), and as an important benefit in the use of the cloud. The key benefit from adopting the cloud is expected to be enhanced customer service. Reference: slide 18 • U.K. banking and capital markets organisations’ risk functions are also using a number of technology applications to address cost pressures. Nine in ten (90 percent) are using big data and analytics to address cost pressures, while 72 percent are using the cloud for that purpose. Reference: slide 19 Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
  • 10. Copyright © 2017 Accenture. All rights reserved. 10 RISING TO MEET COORDINATION CHALLENGES: A SNAPSHOT Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports U.K. banks and capital markets firms are continually striving to embed coordination and achieve a balanced approach to risk across the business, but there is much to be done:
  • 11. RISING TO MEET COORDINATION CHALLENGES: A CLOSER LOOK Copyright © 2017 Accenture. All rights reserved. 11 The risk function is striving to become more centralised and coordinated in order to enhance data management, analysis, decision-making and reporting. • U.K. banking and capital markets organisations are moving toward a more centralised approach to risk management over the next two years. Nearly half (48 percent) anticipate centralised coordination across risk types over the next two years (up from 20 percent today); 40 percent expect to centralise coordination across business lines (up from 14 percent today). Reference: slide 21 • U.K. respondents see room for improvement across all aspects of risk function organisation. More than half (56 percent) say there is duplication of risk management activities across lines of business, and 50 percent say local markets struggle to balance local and organisation-wide risk priorities. Reference: slide 22 • Seven in ten U.K. banking and capital markets respondents (72 percent) see lack of integration with other functions as a key barrier to risk effectiveness, and are planning better integration of risk and finance processes to address this. While only 6 percent say finance and risk currently have a close working relationship and provide input into corporate strategy and enterprise risk management (ERM) steering, 30 percent believe this will be the case in two years’ time. Reference: slide 23 Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
  • 12. Copyright © 2017 Accenture. All rights reserved. 12 BUILDING NEW LAYERS OF TALENT: A SNAPSHOT Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports Risk teams in U.S. banks and capital markets firms are investing in skills to exploit new tools, business models and technology—and address their gaps in capability. Key skill priorities in the year ahead Teams should keep evolving But progress is underway
  • 13. BUILDING NEW LAYERS OF TALENT: A CLOSER LOOK Copyright © 2017 Accenture. All rights reserved. 13 U.K. banking and capital markets organisations are looking to create risk teams that blend core competencies, commercial acumen and a deep understanding of new digital capabilities. This skills mix reflects the growing remit of the risk function and the rapidly increasing importance of new technologies. • U.K. respondents recognise the recent achievements of their risk teams in building a range of capabilities. More than eight in ten respondents (84 percent) say the risk workforce has an effective understanding of the business impact of regulatory changes and of emerging technology risks. Risk teams are seen as less effective at understanding social media (72 percent). Reference: slide 25 • Risk functions are building their teams against a background of skills shortages. These shortages affect U.K. organisations to a greater degree than in the U.S., Japan and globally. Three-quarters (76 percent) of respondents say a shortage of core risk management talent and skills is impeding effectiveness of the function; 72 percent say a shortage of skills in new and emerging technologies is impeding its effectiveness. Reference: slide 26 • U.K. banking and capital markets organisations are prioritising technical risk management skills over the next year. Nearly half (48 percent) plan to strengthen their understanding of emerging technology risks, and 40 percent plan to strengthen their data management capabilities. Reference: slide 27 Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
  • 14. SIX SIMPLE BUT POWERFUL ACTIONS TO TAKE NOW Copyright © 2017 Accenture. All rights reserved. 14 Data-driven technologies speed up operations and improve everything from measurement to anomaly detection. But many firms still need to work on the fundamentals of their IT infrastructure and build internal skills. MITIGATE RISK BY INCREASING DIGITAL AND TECHNOLOGICAL INNOVATION Risk management should strive for greater integration with the CEO and board on strategic decision-making, offering them a clear view of financial, non-financial and emerging risks. There is an opportunity for a more open data- driven dialogue between regulators and financial organisations. Risk managers should be proactive in identifying regulatory concerns and initiating conversations – backed by traceable data. INTRODUCE “SKILLS BLENDING” IN RISK TEAMS TO ENCOURAGE INNOVATION Risk management needs a team of people with creativity, technology acumen and industry knowledge as well as quantitative and analytical skills. This can lead to more innovative solutions, essential in today’s ever-changing environment. MAKE THE MOST OF ANALYTICS BY PUSHING RISK TEAMS BEYOND DATA MANAGEMENT Risk talent should perform information analysis, while automation and supporting professionals manage data quality, integrity, integration and technical issues. This helps capture the full analytical value of professional risk practitioners. The risk function should strive to be more commercially aware. For most, this will mean evolving beyond being simply a “control function” and toward being a transformation leader and joint architect of new business models. 1 6 2 INCREASE TRANSPARENCY AND REDUCE THE REPORTING BURDEN THROUGH A DATA- DRIVEN RELATIONSHIP WITH REGULATORS 3 DEMONSTRATE COMMERCIAL AWARENESS BY LEADING THE WAY ON BUSINESS AND INDUSTRY TRANSFORMATION 5 INCREASE COORDINATION OF RISK MANAGEMENT WITH OTHER BUSINESS FUNCTIONS 4 Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
  • 15. SURVEY DATA & RESULTS: 1. HARNESSING SMART TECHNOLOGIES Copyright © 2017 Accenture. All rights reserved. 15
  • 16. RANGE OF TECHNOLOGY CHALLENGES AFFECTING THE RISK FUNCTION • 82 percent in the U.K. see increased data demands as a key challenge (U.S. 70 percent; Japan 67 percent; total 71 percent). • 82 percent see legacy technologies as a critical concern (U.S. 66 percent, Japan 55 percent; total 69 percent). Copyright © 2017 Accenture. All rights reserved. 16 To what extent do the following challenges impede the overall effectiveness of your risk management function? [To a great extent/to some extent] (Base: 50 – U.K. banking and capital markets) 42% 32% 38% 22% 20% 40% 50% 34% 50% 50% 18% 14% 18% 20% 12% 2% 10% 6% 14% 4% Increased velocity, variety and volume of data Legacy technologies within the risk function Shortage of skills in new and emerging technologies Lack of integration across existing technology infrastructure Disruption of business models from digital technologies To a great extent To some extent To a minimal extent No impact Don't know Respondents identified a number of technology challenges that impede the effectiveness of the risk function. The increased velocity, variety and volume of data, and legacy technologies, have the greatest impact. Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
  • 17. SMART TECHNOLOGIES: FULL POTENTIAL UNTAPPED • 90 percent in the U.K. are using the cloud to some extent, but only 12 percent are highly proficient in using it (U.S. 37 percent; Japan 14 percent; total 21 percent). • 88 percent are using big data and analytics overall, but only 8 percent see themselves as highly proficient (U.S. 30 percent; Japan 12 percent; total 19 percent). Copyright © 2017 Accenture. All rights reserved. 17 Thinking about the range of technologies that you use to support your risk management function, how advanced is your institution’s use of the following technologies? (Base: 50 – U.K. banking and capital markets) 12% 12% 8% 22% 12% 8% 44% 36% 38% 24% 22% 20% 34% 30% 42% 36% 42% 54% 8% 20% 12% 14% 20% 16% Cloud Artificial intelligence Big data and analytics Collaboration and workflow tools Machine learning Robotic process automation We are highly proficient in using this technology We use the technology for our risk function but we’re not extracting the full potential Starting to use to some extent Not using it but see the potential Not using it and do not see the potential A full range of technologies are being used to support the risk management function. Although usage is high, risk teams are not yet using them to their full potential— particularly the more advanced technologies. Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
  • 18. SMART TECHNOLOGIES STRATEGY: BENEFITS & OPPORTUNITIES TO COME Copyright © 2017 Accenture. All rights reserved. 18 What do you see as the biggest opportunities for your organisation with adopting the cloud? …in applying analytics to big data? …in the use of artificial intelligence and machine learning? (Base: 45, 5, 34 – U.K. banking and capital markets) Improvements from applying analytics to big data U.K. U.S. Japan Total Efficiency/ productivity 38% 31% 10% 31% Risk analysis and risk insight 29% 28% 40% 30% Ability to collaborate with external partners 29% 17% 25% 24% Business scalability 24% 38% 20% 24% Accuracy and control 24% 28% 20% 26% Customer service 21% 14% 30% 21% Regulatory data management 18% 31% 20% 28% Compliance 18% 21% 25% 21% Ability to combat financial crime 18% 17% 15% 19% Product profitability/ rationalisation 12% 28% 10% 20% • Largely driven by retail banks, 36% in the U.K. see the main benefit of the cloud as better customer service (U.S. 18 percent; Japan 29 percent; total 27 percent). • While adoption of AI and machine learning is low, U.K. banks and capital markets firms still see opportunities for use across multiple areas, with improved efficiency to the fore. • Improved efficiency is an important benefit of applying analytics to big data. Improvements from adopting the cloud U.K. U.S. Japan Total Customer service 36% 18% 29% 27% Efficiency/ productivity 33% 35% 26% 34% Compliance 29% 20% 21% 25% Risk analysis and risk insight 29% 18% 29% 28% Accuracy and control 27% 29% 21% 22% Regulatory data management 24% 43% 16% 24% Ability to collaborate with external partners 20% 25% 18% 21% Product profitability/ rationalisation 16% 25% 24% 24% Business scalability 16% 24% 29% 23% Ability to combat financial crime 16% 22% 21% 16% Improvements from use of AI and machine learning U.K. U.S. Japan Total Efficiency/ productivity 40% 27% 43% 32% Business scalability 40% 27% 29% 32% Accuracy and control 40% 9% 57% 32% Compliance 40% 9% 0% 13% Customer service 20% 45% 0% 37% Regulatory data management 20% 45% 14% 24% Risk analysis and risk insight 20% 36% 86% 55% Ability to collaborate with external partners 0% 27% 14% 11% Ability to combat financial crime 0% 27% 14% 18% Product profitability/ rationalisation 0% 27% 14% 21% U.K. banking and capital markets respondents believe that continued investment in smart technologies can help increase efficiency, productivity and improve customer service. Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
  • 19. ADDRESSING COST PRESSURES: BIG DATA AND ANALYTICS ARE CRUCIAL U.K. banking and capital markets firms are using a range of technologies as part of a wider strategy to ease cost pressures. • 90 percent in the U.K. are using big data and analytics to address such concerns (U.S. 87 percent; Japan 86 percent; total 83 percent). • 72 percent are using the cloud for this purpose (U.S. 72 percent; Japan 75 percent; total also 74 percent). • 72 percent are using artificial intelligence to better respond to cost pressures. This is more than in the U.S. (65 percent), Japan (55 percent) and globally (67 percent). Copyright © 2017 Accenture. All rights reserved. 19 To what extent are the following technologies enabling your risk function to address the cost pressures you are facing? (Base: 50 – U.K. banking and capital markets) 38% 32% 14% 16% 26% 10% 52% 40% 58% 54% 42% 46% 10% 22% 18% 22% 24% 32% 6% 10% 8% 8% 12% Big data and analytics Cloud Artificial intelligence Collaboration and workflow tools Machine learning Robotic process automation To a great extent To some extent To a minimal extent No impact Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
  • 20. SURVEY DATA & RESULTS 2. RISING TO MEET COORDINATION CHALLENGES Copyright © 2017 Accenture. All rights reserved. 20
  • 21. RISK MANAGEMENT COORDINATION: TREND IS MOVING TOWARDS CENTRALISATION The study shows that currently there is a decentralised operating model, but a high proportion of U.K. banking and capital markets respondents are striving for more centralisation. Copyright © 2017 Accenture. All rights reserved. 21 Using scores between 1 and 5, please indicate how risk management activities are currently coordinated across risk type, and how you expect them to be coordinated in two years’ time. Using scores between 1 and 5, please indicate how risk management activities are currently coordinated across specific lines of business, and how you expect them to be coordinated across specific lines of business in two years’ time. (Base: 50 – U.K. banking and capital markets) RISK COORDINATION ACROSS RISK TYPES (e.g. market risk, credit risk, liquidity) RISK COORDINATION ACROSS LINES OF BUSINESS 28% 24% 48% 38% 42% 20% Decentralised - risk management operates at a regional level Risk management operates equally at both a group and regional level Centralised - risk management operates at a group level In two years' time Now 22% 38% 40% 52% 34% 14% Decentralised - risk management operates at a regional level Risk management operates equally at both a group and regional level Centralised - risk management operates at a group level In two years' time Now • 48 percent in the U.K. expect centralised coordination across risk types over the next two years, up from 20 percent today. • 40 percent anticipate centralised coordination across business lines over the next two years, up from 14 percent today. Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
  • 22. THE INTEGRATION CHALLENGE: A COMMON VIEW OF RISK INFORMATION U.K. banking and capital markets respondents see room for improvement across all aspects of the risk function organisation. 22 Thinking of your risk management function, to what extent do you agree or disagree with the following statements? Over the next two years, what changes do you expect to your use of outsourcing for the following risk processes? [Strongly agree/agree] (Base: 50 – U.K. banking and capital markets) 12% 8% 16% 6% 44% 42% 32% 32% 34% 38% 32% 46% 10% 10% 18% 10% There is duplication of effort in risk management activities across lines of business Local markets struggle to balance management of risk at the local level with organisation-wide risk priorities There is limited coordination between risk management activities at the local level and at the group level Organisation-wide risk processes do not capture the nuances of local markets Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Copyright © 2017 Accenture. All rights reserved. • 56 percent in the U.K. say there is duplication of risk management activities across lines of business (U.S. 55 percent; Japan 47 percent; total 54 percent). • 50 percent say local markets struggle to balance the management of risk at the local level with organisation-wide risk priorities (U.S. 57 percent; Japan 47 percent; total 57 percent). Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
  • 23. RISK AND FINANCE INTEGRATION: CLOSER ALIGNMENT ANTICIPATED Our study found seven in ten U.K. banking and capital markets respondents (72 percent) see lack of integration with other functions as a key barrier to risk effectiveness. They are planning better integration of risk and finance processes to address this challenge. Copyright © 2017 Accenture. All rights reserved. 23 Please indicate how your risk function currently performs in regard to finance and risk integration, using scores between 1 and 5 (where 1 is limited integration and 5 is full integration). [Aggregate 4/5 ratings] (Base: 50 – U.K. banking and capital markets) 6% 52% 42% Now • Finance and risk are working closely in a small minority of companies today: only 6 percent in the U.K. say they both provide input into corporate strategy and ERM steering (U.S. 37 percent; Japan 24 percent; total 25 percent). • 30 percent believe this will be the case in two years’ time (U.S. 52 percent, Japan 43 percent; total 45 percent). 30% 34% 36% In two years' time Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
  • 24. SURVEY DATA & RESULTS 3. BUILDING NEW LAYERS OF TALENT Copyright © 2017 Accenture. All rights reserved. 24
  • 25. RISK MANAGEMENT WORKFORCE: BUILDING A FULL RANGE OF CAPABILITIES U.K. based banking and capital markets respondents recognise the recent achievements of their risk teams in building a range of capabilities, but less so in emerging technology risks such as social media. • 84 percent in the U.K. say the risk workforce is effective in understanding the business impact of regulatory changes (U.S. 83 percent; Japan 71 percent; total 77 percent). • 84 percent say they have an effective understanding of emerging technology risks (U.S. 78 percent; Japan 61 percent; total 77 percent). • Risk teams are seen as less effective in their understanding of social media (72 percent against U.S. 78 percent; Japan 67 percent; total 72 percent). Copyright © 2017 Accenture. All rights reserved. 25 Thinking of your risk management workforce capabilities, how effective are they across the following areas? [Very effective/effective] To what extent do you agree or disagree with the following statements? [Strongly agree/agree] (Base: 50 – U.K. banking and capital markets) 84% 84% 82% 80% 80% 80% 78% 72% Understanding business impact of regulatory changes Understanding of emerging technology risks Understanding of key sector trends Ability to apply analytics to risk management Performing risk control activities Commercial awareness Data management Understanding of social media Reporting cyber risk • 62 percent agree that they have a cyber risk management function that can effectively challenge the IT function and accurately report the real status of cyber risk to the board (U.S. 78%; Japan 69%; total 69%). Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
  • 26. TALENT CHALLENGES REMAIN: SKILLS SHORTAGES IMPEDES THE RISK FUNCTION While U.K. banking and capital markets respondents believe their risk management capabilities are effective across the board, skills shortages were still identified as one of the challenges impacting effectiveness of the risk function. • Three-quarters (76 percent) of respondents in the U.K. say a shortage of core risk management talent and skills is impeding effectiveness of the function (U.S. 67 percent; Japan, 65 percent; total 67 percent). • 72 percent say a shortage of skills in new and emerging technologies is impeding the function’s effectiveness (U.S. 61 percent; Japan 69 percent; total 68 percent). Copyright © 2017 Accenture. All rights reserved. 26 To what extent do the following challenges impede the overall effectiveness of your risk management function? [To a great extent/to some extent] (Base: 50 – U.K. banking and capital markets) 28% 38% 48% 34% 14% 18% 8% 10% Shortage of core risk management talent and skills Shortage of skills in new and emerging technologies To a great extent To some extent To a minimal extent No impact Don't know Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
  • 27. Copyright © 2017 Accenture. All rights reserved. 27 What are the priority risk management capabilities your institution plans to strengthen over the next year? (Base: 50 – U.K. banking and capital markets) • 48 percent in the U.K. plan to strengthen understanding of emerging technology risks (U.S. 48 percent; Japan 49 percent; total 48 percent). • 40 percent plan to strengthen data management (U.S. 50 percent Japan 49 percent; total 45 percent). BUILDING RISK CAPABILITIES: EVOLVING SKILL SETS 48% 40% 32% 30% 28% 26% Understanding of emerging technology risks Data management Advanced mathematical and statistical knowledge Understanding of key trends in our sector Broader commercial awareness Managing reputational risk associated with social media Increasing stakeholder demands and emerging risk types require risk teams to add new skills to traditional risk management experience. U.K. banking and capital markets respondents are prioritising technical risk management skills over the next year, with an emphasis on understanding emerging technology risks and data management. Accenture 2017 Global Risk Management Study: Banking & Capital Markets Reports
  • 28. DOWNLOAD OUR BANKING AND CAPITAL MARKETS REPORTS NOW RISK FUNCTION’S FUTURE SUCCESS Or contact: Peter Beardshaw (Banking): peter.beardshaw@accenture.com Ashley Davies (Cap Markets): ashley.davies@accenture.com Mark Wheaton (Cap Markets): mark.wheaton@accenture.com Visit: www.accenture.com/RiskStudyBanking www.accenture.com/RiskStudyCapitalMarkets Today more than ever, modern banks and investment firms need a risk function that goes far beyond compliance to become an integrated, strategic cog in the primary gears of the business.
  • 29. ABOUT ACCENTURE Accenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions—underpinned by the world’s largest delivery network —Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With more than 425,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com 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. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. Copyright © 2017 Accenture. All rights reserved. EXPOSED: THE HIDDEN VALUE OF RISK IN BANKING & CAPITAL MARKETS ACCENTURE 2017 GLOBAL RISK MANAGEMENT STUDY

Notes de l'éditeur

  1. NOTE: Global versions of the Banking and CM presentations include more background information on the Global Risk Study, a summary view on the evolution of risk management (based on 2009 to 2017 risk study results), and a narrative that explains each of the three themes the risk study explores: technology (harnessing smart technology), integration (rising to meet coordination challenges) and talent (building new layers of talent). This presentation covers the same themes and presents the UK data, plus comparisons with other countries (US and Japan).
  2. WE SURVEYED 50 U.K. BASED BANKING AND CAPITAL MARKETS RESPONDENTS UK respondents – based in London/UK. Not necessarily just UK headquartered. May include respondents working for global banks/CM firms in the UK Breakdown of UK CM vs Banking respondents N=32 for UK Banking, N=18 for UK CM
  3. USE WITH CLIENTS
  4. NOTES FOR PRESENTOR: This table shows how respondents believe they can benefit from adopting these technologies. The responses for AI/ML and Big Data/Analytics are from those organizations who are actively using the tools Side note on reporting to regulators: - Given that this is number one risk challenge (from slide 3), and that 62% agree systems/capabilities need to be improved for reporting regulators – interesting that regulatory data management is quite low.
  5. Addressing cost pressures, does not equal reducing costs. The technologies could enable any of the ways risk is responding to cost pressures we outlined in the previous question (Q4): Aligning management and employee skills with the changing needs of the risk function Improving efficiency through smart technologies such as robotic process automation, artificial intelligence, or Big Data and analytics Changes to the operating model: (e.g. use of shared services, low cost locations). Outsourcing non-core activities Taking a holistic approach by investing in future-proofed systems that reduce investment costs over the long run Adopting a standardized approach to risk management (e.g. move from advanced models to a more standardized approach). Reducing head count
  6. Side note Outsourcing of risk reporting and technology implementation will increase over the coming two years. This could help with efforts around integration: 54 percent expect to increase outsourcing of risk reporting (U.S. 52 percent; Japan 49 percent; total 50 percent) 58 percent expect to increase outsourcing of technology implementation (U.S. 61 percent; Japan 55 percent; total 54 percent)
  7. Side note (originally in the slide but pulled out to keep slide cleaner, now moved to notes) Lack of integration impedes risk management effectiveness (identified as one of the top challenges) 72 percent agree that lack of integration with other business functions impedes the overall effectiveness of the risk management function (U.S. 65 percent; Japan 55 percent; total 62 percent)