Risk Management: Tech & Cyber Risk Top List for Banks

According to a recent survey of bank chief risk officers, technology & cyber risks are their top areas of concern.  The survey was conducted by ProSight & Oliver Wyman, and includes responses from Global Systemically Important Banks, B, super-regional, regional, and mid-tier banks. Here’s what the the respondents had to say about the tech & cyber risks they face:

74% of respondents cited technology and cyber risk as their top risk category. CROs said an increased focus on digitalization and AI gives bad actors more potential entry points into banks and customer accounts, while legacy systems connected to new technologies create potential integration vulnerabilities. One large bank CRO noted that the web of third parties banks rely on for digital banking services is an expanding attack surface for cyber exploits. At the same time, geopolitical risk (cited by 22% of respondents as their top risk) is a key driver of cyber risk, as nation-states attempt to exploit critical infrastructure such as financial services.

The survey also indicates that banks are moving forward quickly with AI-related projects. Respondents said that 54% of banks have adopted AI in production and 48% anticipate deploying AI in risk management functions over the next two years.  However, the survey suggests that financial institutions have a long way to go when it comes to building out AI risk management frameworks, with only 12% of CROs characterizing their AI governance framework as “highly developed.”