Technological, regulatory and geopolitical upheavals are shaping the volatile market environment. The change has far-reaching consequences for Chief Risk Officers (CRO) in the financial sector. What is the current risk management situation in companies - and what changes are coming? In our CRO Benchmark Study 2024, we analyze the status quo of the CRO function. We highlight practical trends and identify focus areas that may be particularly relevant for successful risk management in times of diverse transformation processes.
CRO Benchmark Study 2024: Five key findings in a nutshell
The study is based on an analysis of data from 130 mostly medium-sized European banks.
- Employee capacities: Credit risk stands out in the financial institutions analyzed in terms of full-time equivalents (FTE): credit risk management ties up 45 percent of capacities. At 14 percent, compliance comes a distant second.
- Cost structure: Personnel costs (72 percent) are higher than the operational costs of the organizations (26 percent). This is an indicator that the CRO function requires specialists with specialist knowledge and correspondingly higher salaries. Further training for employees is also essential.
- Investments: More than half of the banks reported higher costs for personnel and operations in 2023. Further increases were expected. The upward trend is particularly pronounced at larger institutions, which are coping with complex risk landscapes and stricter compliance requirements.
- Hierarchy: 40 percent of employees in the CRO function are Associates, 32 percent are Analysts. Directors make up 7 percent and Managing Directors only 2 percent. The ratio of management to non-management positions is expected to fall from 1:11 to at least 1:9 as a result of future AI automation.
- Non-financial risk: 78% of banks have hired additional employees for the management of non-financial risks in 2023, 43% also plan to hire additional employees in 2024. Cyber risks are a particular focus in reports to the Chief Risk Officer.
