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Financial firm risk managers 'struggling to manage threat of disruptive tech'

Dec 10
Tags: Accenture
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Financial firm risk managers 'struggling to manage threat of...

Risk management is an area where many financial services businesses may need more support to handle the potential dangers posed by disruptive technologies in the coming years, research has suggested.

Accenture surveyed nearly 700 risk management executives in the global banking, insurance and capital markets sectors for its 2019 Global Risk Management Study.

It found that "an overwhelming majority" of risk managers with financial firms feel ill-prepared to evaluate the threat of fast-moving, complex technologies like artificial intelligence (AI), robotic process automation (RPA) and blockchain.

Just one in ten respondents (11 per cent) said they felt fully capable of assessing the risks associated with adopting AI across their organisations. Levels of preparedness were even lower for RPA and blockchain - at nine per cent and five per cent respectively.

The report also highlighted the trend of increasing complexity and accelerating change in the external risk environment, which is forcing managers to come up with new responses to threats.

Nearly three-quarters (72 per cent) of the executives surveyed said complicated, interconnected risks are emerging more rapidly than ever before. Four out of ten respondents (42 per cent) said their risk function is, at best, only somewhat effective at responding rapidly to changes in the surrounding environment.

Steve Culp, a senior managing director at Accenture and leader of the firm's finance and risk practice, said risk managers simply "aren't able to evolve at the same pace as technology".

He added: "Fortunately, risk managers acknowledge the need to adapt and embrace new tools and approaches, including broader sources of data, advanced analytics and AI, even against a backdrop of mounting cost pressures."

One of the more encouraging findings from the research indicated that firms can improve their readiness to respond to disruptive technologies like AI by embracing innovation within their own organisations.

Nearly three-quarters (73 per cent) of respondents whose risk functions utilised machine learning said they were satisfied with the company's recent progress in preparing for future scenarios and volatility.

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