Skip to main content
Submit RFP

      In an era marked by constant disruption, the role of risk management in banking is evolving rapidly. To navigate this landscape, Chief Risk Officers (CROs) are no longer just compliance overseers; they are strategic guides steering organisations toward resilience and opportunity. Here’s a closer look into the forces shaping the future of risk in banking, as explored in KPMG's extensive research.

      Key drivers of the evolving risk landscape

      Several factors are reshaping risk management in banking:

      • Emerging risks

        Several interconnected factors are reshaping banks’ risk functions, including global fragmentation into trading blocs, geopolitical conflicts, and emerging technologies that present both risks and opportunities. KPMG's research highlights economic volatility and geopolitical complexity as the top challenges for banks.

      • Managing digital operations and digitalisation

        Digitalisation is transforming banking services and controls, offering significant potential benefits but also exposing institutions to evolving risks like fraud, consumer protection issues, and system disruptions. To stay competitive, banks must balance innovation with effective risk management.

      • Meeting evolving regulations

        Banks face diverse regulatory challenges, including compliance and ESG requirements, which vary by region and complicate adherence. KPMG's research identifies adapting to these evolving regulations as a key to transforming risk management, with compliance as a top strategy. While achieving compliance requires significant investment, AI and digital tools can lower costs. Banks' expertise in regulation gives them an advantage over fintech’s.

      A roadmap to the future of risk management

      Risk identification

      Banks must implement mechanisms for rapid identification of emerging risks, assess their interdependencies, and use proactive, scenario-driven evaluations to address disruptive events effectively and safeguard operations.

      Risk measurement

      Dynamic risk assessment frameworks must combine qualitative and quantitative methods, implement cross-risk stress testing, and leverage integrated simulation tools for enterprise-wide evaluation of threats and opportunities.

      Risk monitoring, control, and reporting

      Advanced monitoring requires enterprise-wide collaboration, AI-driven solutions for efficiencies, and enhanced reporting systems that focus on actionable insights and alignment with regulatory demands.

      Data and infrastructure

      Effective risk management hinges on clean, integrated data from modernised systems, addressing legacy fragmentation and allowing scalable technologies like AI to unlock valuable insights critical for resilience and compliance.

      Transform risk into opportunity

      For risk leaders ready to embrace the future, this paper delivers some of the knowledge and tools necessary to help navigate today’s complex challenges. Explore how to turn risk into an opportunity for value creation and align your organisation with the demands of the modern risk environment.

      pdf

      The future of risk in banking

      Transforming risk management for a dynamic new era
      Download

      Related content

      How a structured and modern risk management adds value
      Read more

      Building a trusted risk function to succeed in a riskier world
      Read more

      How to fight financial crime in a bold new era of risk.

      Read more

      Our people

      Jonathan Ho
      Jonathan Ho

      Partner, Head of Risk, Advisory and Head of Infrastructure, Government & Healthcare

      KPMG in Singapore

      Connect with us

      KPMG combines our multi-disciplinary approach with deep, practical industry knowledge to help clients meet challenges and respond to opportunities. Connect with our team to start the conversation.

      Contact us