The sphere

of control
Accenture 2019
Global Risk Management Study
Banking Report
Discover how banking leaders are taking a holistic
view of the risk landscape, prioritizing what they
do know and preparing for what they don’t.
Contents
3 17
INTRODUCTION SECTION 4
Evolving ecosystems, Combatting cyber threats
evolving threats in a digital, open banking era

7 21
SECTION 1 SECTION 5
Financial crime: a Don’t overlook LIBOR
disaggregated ecosystem retirement
exposes new vulnerabilities

25
SECTION 6

12
SECTION 2 How banks can manage
Credit risk: a new way today’s major threats
to tackle an old foe

28
CONCLUSION

14
SECTION 3 Define your sphere of control
AI tools ease compliance
with new regulation
INTRODUCTION

Evolving ecosystems,
evolving threats
Banking risk teams need a fresh approach to manage
the threats unleashed by emerging technology,
open banking, and relentless competition.

Accenture 2019 Global Risk Management Study Banking 3

Introduction Evolving ecosystems, evolving threats

Welcome to This year we explore how banks are responding to emerging risks,
particularly those relating to financial crime, credit risk, changing

Accenture’s
regulation, cyber threats and LIBOR retirement.

2019 Global Risk

This report presents the findings from For a start, risk managers across financial
our 2019 Global Risk Management Study, services acknowledge that complex,

Management
which uncovers how 683 surveyed risk interconnected new risks are emerging at
executives across the entire financial a more rapid pace than ever before. Nearly
services industry, including those working six in ten say that disruptive technology

Study report for banks, insurance and capital markets

businesses, are adapting to the ever-
risk has greater impact on their business
today than it did two years ago.

on banking.
increasing pace and volume of change
outside the four walls of the organization. A major cause of their concern relates to
the growing adoption of new technologies
What did we find in the survey? across the organization. Of course, these
Let’s quickly recap before delving technologies hold immense potential
deeper into the banking findings. to unleash growth and drive efficiencies,
but risk functions worry about the potential
for unforeseen consequences, which
they are currently not capable of
identifying or assessing.

Accenture 2019 Global Risk Management Study Banking 4

Introduction Evolving ecosystems, evolving threats

57%
Faced with an increasingly complex, but data-rich Technology aside, an effective risk function is one
risk environment, risk functions should invest in that is armed with the data it needs to anticipate,
smart technologies such as artificial intelligence assess, and ultimately mitigate emerging threats.
(AI) and natural language processing (NLP) that
have immense potential to improve effectiveness But today, many are not. For example, 57 percent
and efficiency. Indeed, survey respondents that of our study respondents expect to use marketing
have deployed machine learning feel much more data to support their risk management activity in
of our study respondents confident that they have prepared their business two years’ time, but only 39 percent do so today.
expect to use marketing for volatile future scenarios.
Getting access to relevant data is one thing, but
data to support their risk But while the benefits are significant, risk functions’ maintaining the quality and knowing how to analyze
management activity in use of the most sophisticated technologies is it effectively to generate useful insights remains a
two years’ time, but only currently limited. Our study findings indicate that significant challenge. The risk managers we surveyed
as part of the 2019 Global Risk Management Study
39 percent do so today. the risk function is aware of the need to embrace
realize that they fall short here, so they are urgently
these new tools, but is simply slow in making
effective use of these to date. seeking to improve both their data-collection and
analysis skills: 63 percent are urgently improving
their ability to collect enterprise-wide data, and
66 percent are honing their ability to analyze it.

Accenture 2019 Global Risk Management Study Banking 5

Introduction Evolving ecosystems, evolving threats

Which threats are our cohort Top of the list is financial crime. Credit risk This creates a long-term strategic threat in
is second, and evolving regulation and the form of loss of market share. But it also
of 255 bank risk executives most cyber threats are joint-third. causes immediate vulnerabilities that make
concerned about? We asked risk financial crime and cyber attacks harder
managers as part of Accenture’s Risk leaders have grappled with these to detect and prevent.
2019 Global Risk Management threats for years. But the nature of each
of them is now changing, which demands This report looks at the most pressing risks,
Study, and found them concerned new responses. Traditional risks have explores how threats are changing, and
about the old and the new. morphed into more challenging threats, sets out a way for banks to respond.
in part due to the banking ecosystem being
in flux. Gone are the days when customers
purchased all of their banking services from
large household names; new entrants,
open banking regulation and advances in
technology mean that the heritage industry
players now face stiff competition from
challenger banks and FinTechs (financial
technology firms) for an increasing scope
of products and services.

Accenture 2019 Global Risk Management Study Banking 6

SECTION 1

Financial crime:
a disaggregated
ecosystem exposes
new vulnerabilities
Surveyed banks pinpoint financial crime
as their top concern (see Figure 1).

Accenture 2019 Global Risk Management Study Banking 7

Section 1 Financial crime: a disaggregated ecosystem exposes new vulnerabilities

That is no surprise: Every year, banks have to invest millions Figure 1. Areas of greatest concern to the banking industry
in anti-money laundering (AML) and know-your-customer Thinking specifically about the banking industry, which of the following
areas are currently causing your business the greatest amount of concern?
compliance. Research puts the total figure at $25bn annually
for U.S. financial services,1 and at $20bn annually in Europe.2

Those that don’t make this investment also run the risk of
incurring significant regulatory fines and reputational damage. Financial crime, including AML & fraud 49%
Costs aside, risk and compliance procedures implemented to Credit risk 35%
prevent financial crime can themselves create a risk of adding Financial crime and credit
too much friction to the customer journey, whether it be the risk cause greatest concern
identification requirements for opening a new bank account or
credit card transactions that are declined due to fraud concerns. Evolving regulation 29%
Increasing frequency & sophistication of cyber threats 29%
This all represents a huge headache, but it is not necessarily Customer interest in technology-enabled offerings 25%
new. So why is financial crime the top worry today? Emergence of non-traditional competitors 20%
Shifts in the macroeconomic variables 19%
Open banking models 15%
Impact of geopolitical change in key regions 13%
Maturity of the business cycle 13%
Growth in sub-prime 11%
Retirement of LIBOR 7%

Source: Accenture 2019 Global Risk Management Study

Accenture 2019 Global Risk Management Study Banking 8

Section 1 Financial crime: a disaggregated ecosystem exposes new vulnerabilities

Figure 2. Level of confidence in managing Put simply, financial crime is becoming more
the impact of financial crime complex. Today, bad actors use sophisticated
How confident are you that your risk function is set up to fully support cyber attacks and seek to exploit gaps in the
your business in managing threats related to financial crime? increasingly complex banking ecosystem
to perpetrate financial crime.

In parallel, one effect of open banking and

Highly confident 11% the rise of FinTechs is that customers spend
Only 11 percent are highly confident in managing less time interacting directly with their banks.
the impact of financial crime This creates more challenges for institutions
to build up a picture of ‘normal behavior’
Slightly confident 32% and to spot abnormal activity that could
be a sign of financial crime.
Neither confident
nor unconfident 29% No wonder only 11 percent of study
respondents are highly confident in their
Not very confident 27% ability to help their businesses mitigate
the impact of financial crime (see Figure 2).
Not at all confident 1%

Source: Accenture 2019 Global Risk Management Study

Accenture 2019 Global Risk Management Study Banking 9

Section 1 Financial crime: a disaggregated ecosystem exposes new vulnerabilities

Bots, not bodies

Banks should invest more to stay on top of this increasingly bewildering
threat. But simply increasing headcount to do more of the same won’t work.

12%
Instead, they are encouraged to do two things.

First, they should explore how smart technologies But these tools are only as good as the data
such as AI and machine learning can assist in that feeds them. Unless banks devote effort and
detecting and preventing financial crime. We know resources into cleansing and synthesizing their
that only 12 percent of surveyed risk functions use data, these technologies could spit out false
machine learning, but it could be invaluable in positives. So, significant investment in data
Only 12 percent of
spotting the anomalies in data that might indicate should accompany investment in analytical tools.
financial crime. They can also learn patterns in surveyed risk functions
data—such as a known risk entity combined with Second, risk managers should reconsider how use machine learning.
an obscure structuring arrangement—that indicate financial crime risk is managed. Threats are now
malicious activity, and flag when they occur. appearing at the intersections of previously
discrete risks, so a siloed approach—where specific
To be effective, this should take place in real time in teams manage individual threats—won’t work.
multiple channels across the enterprise. Of course,
firms should strike the right balance between Instead, risk teams should explore a ‘hub and spoke’
limiting fraud and not introducing significant model. The ‘hub’ provides centralized expertise
friction into the customer experience. and oversight, and the spokes specialize in specific
categories of financial crime.

Accenture 2019 Global Risk Management Study Banking 10

Section 1 Financial crime: a disaggregated ecosystem exposes new vulnerabilities

“The banks that keep adding more bodies to tackle

the problem in the same old way are also the slowest
to respond to the changing risk environment.
It becomes increasingly expensive and complicated
if you don’t invest in data and analytics, aren’t ultra-
proactive around the business challenge, and don’t
drive the workforce to be more proactive about risk,
problems will persist and mount.”
Steve Culp
Senior Managing Director, Accenture Financial Services
Management Consulting and Finance & Risk

Accenture 2019 Global Risk Management Study Banking 11

SECTION 2

Credit risk: a new way

to tackle an old foe
Credit risk has existed for as long as banks themselves.
Today, it is banks’ second greatest concern, and only
13 percent of respondents are highly confident in their
ability to manage this risk.

Accenture 2019 Global Risk Management Study Banking 12

Section 2 Credit risk: a new way to tackle an old foe

This is unsurprising, given the recent surge in global debt levels.

According to the Institute of International Finance, global debt “Has the way that banks manage
currently stands at its second-highest dollar level on record
following an unexpected rise in the first quarter of 2019.3
credit risk really changed in
the last five years? While some
progress has been made,
How can banks better manage credit risk? One way is to deploy
automation, AI, and other smart technologies to assess credit
risk—whether in relation to a mortgage, credit card loan, or other
loan. These technologies can be used to validate credit risk the answer for most is ‘no’.
models or even permit credit decisioning at the point of sale.
Of course, automation should be introduced responsibly and AI and intelligent automation
should not bake biases into credit decision-making.
bring benefits to do this,
But while some forward-thinking financial institutions are
like greater efficiency and
effectiveness, while adding
using smart technologies extensively to help assess credit risk,
the majority of banks still employ large teams to manually analyze
loan applications. Smart technologies can reduce the cost and
improve the accuracy of this process. to existing human capabilities.”
Technology aside, there are other ways to tackle credit risk
Steve Culp
creatively. Some leading banks, for instance, are widening the
spectrum of criteria they consider when evaluating credit risk—
Senior Managing Director, Accenture Financial Services
firms’ cyber vulnerabilities is one example of a new consideration. Management Consulting and Finance & Risk

Accenture 2019 Global Risk Management Study Banking 13

SECTION 3

AI tools ease
compliance with
new regulation
The post-crisis tidal wave of financial services regulation has
passed, but banks surveyed as part of the 2019 Global Risk
Management Study still cite evolving regulation as their
joint-third most pressing concern, alongside cyber threats.

Accenture 2019 Global Risk Management Study Banking 14

Section 3 AI tools ease compliance with new regulation

Why is regulation still such a concern? How can regulatory risk be managed more Banking risk managers should also get better
For a start, there is the cost. Banks have effectively? The first step is to clarify where at engaging with regulators. As regulators ask
invested significantly in complying with the balance of responsibility lies between the for more and more datasets, risk teams are
privacy regulations such as the General Data first and second lines of defense for designing expected to improve their ability to produce
Protection Regulation (GDPR), and are vulnerable and testing the risk controls adopted in data and analytics on demand. And effective
to huge fines if they do not comply or suffer a response to new regulation. engagement is consistent engagement:
significant data breach. Then there is increased Banks should look at their internal organization
supervision of banks. Rather than just laying In parallel, risk managers should investigate and decide who will be responsible for
down the law, regulators are now more proactive and deploy some of the latest tools and work working with regulators so that a consistent
in checking compliance and requesting data processes that identify and then assess the response is provided.
that demonstrates compliance. consequences of regulatory changes.
Risk functions should also demonstrate data
Indeed, we have observed that leading risk transparency and traceability to regulators.
That is all taking its toll: functions have deployed AI and machine learning- In the future, they may have to articulate how
based technologies that scan speeches, news
Just 10 percent of surveyed outlets and regulators’ websites for information
their organizations are deploying technologies
such as AI responsibly so that certain sections
banks are highly confident that indicates that new regulation is being of society are not discriminated against.
in their ability to manage considered. These tools then track proposed
regulatory risk. regulation as it passes into law. When it is, they scan, One simple practical step that can be taken to
synthesize and de-duplicate relevant regulatory bolster relations is to invite relevant regulatory
text before it is ingested into the organization, stakeholders to observe the disruptive work
where it is analyzed in order to create actionable that is happening at innovation labs.
objectives. This approach has the added benefit of
creating an audit trail of how banks apply new rules.

Accenture 2019 Global Risk Management Study Banking 15

Section 3 AI tools ease compliance with new regulation

“Risk functions have to improve how they

engage with regulators. Many need to
develop the capability to provide data on
request more efficiently, for example through
regulatory APIs to improve transparency.”
Rafael Gomes
Managing Director, Accenture Financial Services
Finance & Risk

Accenture 2019 Global Risk Management Study Banking 16

SECTION 4

Combatting cyber
threats in a digital,
open banking era
The increasing frequency and sophistication of cyber
threats is surveyed as banks’ joint-third greatest risk.

Accenture 2019 Global Risk Management Study Banking 17

Section 4 Combatting cyber threats in a digital, open banking era

Figure 3. Level of confidence in managing It is there because of the relentless pace

the impact of cyber attacks of bad actors’ innovation and the financial
How confident are you that your risk function is set up to fully support and reputational damage that a major
your business in managing threats relating to the increasing frequency attack can inflict on an organization.
and sophistication of cyber attacks?

Only 9 percent of risk managers are

highly confident in their ability to manage
Highly confident 9% cyber attacks (see Figure 3). That is partly
Only 9 percent are highly confident in managing because the methods of attack constantly
the impact of cyber attacks change, but also because the new
banking ecosystem has introduced
Slightly confident 32% cyber vulnerabilities.

Neither confident For example, the advent of open

nor unconfident 33% banking, which requires banks to open
up their systems and data to third parties,
Not very confident 26% entangles the two together like never
before. As a result, banks should no longer
Not at all confident 0% just protect their own networks; they
should maintain cyber resilience across
the entire ecosystem.

Source: Accenture 2019 Global Risk Management Study

Accenture 2019 Global Risk Management Study Banking 18

Section 4 Combatting cyber threats in a digital, open banking era

Smart tech holds promise,

but don’t forget the basics
How can banks foster cyber resiliency? With their huge potential to,

43%
for example, detect and classify malware or to identify suspicious
activity across the network, new technologies such as AI and
machine learning offer one answer.

However, only 43 percent of banks The organization should train its people
surveyed as part of Accenture’s 2018 to spot malicious activity, such as phishing;
State of Resilience Study use machine categorize its most important data; and
Only 43 percent of banks
learning and AI for cyber security.4 make sure that this data is protected.
That might be a disappointingly
use machine learning and
low proportion, but it does offer Banks should also make sure that their AI for cyber security.
immediate scope for banks to improve ecosystem alliances are getting the cyber
their cyber resiliency by deploying security basics right. Only 38 percent of the
sophisticated technology. State of Resilience banking respondents
hold their alliances to the same cyber
Yet there is work to do first. These security standards as themselves,5 so they
technologies should only be deployed should prioritize a collaborative approach
once the basics have been implemented: to getting cyber defenses up to standard.

Accenture 2019 Global Risk Management Study Banking 19

Section 4 Combatting cyber threats in a digital, open banking era

“Previously banks looked at risks in silos.

But new threats are emerging at the intersection
of things like cyber attacks, money laundering
and open banking, for example.
To free up capacity to explore what’s new,
banks should take steps to standardize,
automate and even outsource the management
of some of the more established risks.”
Rafael Gomes
Managing Director, Accenture Financial Services
Finance & Risk

Accenture 2019 Global Risk Management Study Banking 20

SECTION 5

Don’t overlook
LIBOR retirement
The 2021 retirement of LIBOR and transition to
other interbank offered rates (IBORs) may not
pose an immediate threat that is of the same
magnitude as other risks discussed in this
report, but it can’t be ignored.

Accenture 2019 Global Risk Management Study Banking 21

Section 5 Don’t overlook LIBOR retirement

Whether it is the risk of basis But our Global Risk Management Study
exposure, the sheer effort required to reveals that this call has, to date, gone
update LIBOR provisions in contracts, unanswered. Tellingly, just 7 percent
or managing conduct risk, LIBOR of banking risk managers cite LIBOR
transition is a major undertaking that retirement as a top-three concern.
demands proactive risk management. They have not even recognized it as
a major threat, let alone started to act.
Non-risk business leaders
acknowledge this and have called Now it is time for risk leaders
on risk teams to assist. Almost to step up. Instead of simply
three-quarters of financial services recalibrating risk models, they
businesses surveyed in Accenture’s should work collaboratively
2019 LIBOR Survey say risk with other business functions
management and front-office quant to unearth the impact on
teams are of greater importance the entire business.
in supporting LIBOR transition.6

Accenture 2019 Global Risk Management Study Banking 22

Section 5 Don’t overlook LIBOR retirement

Uncover the hidden risks of LIBOR transition

What exactly should risk teams do to help prepare? The first step is to identify
and then quantify exposure to specific LIBOR risks. LIBOR exposure lurks
in hidden corners of businesses’ operations, so risk managers should be
thorough in their approach.

Second, risk managers should establish Conduct risk should also remain in focus.
a robust framework to assess and manage Whether in relation to client interactions
the risks associated with the transition. This or contributing to the new benchmark,
should cover how the transition impacts a risk managers should devise measures
range of risks, including foreign exchange to protect clients and markets from abuse.
(FX) risk, liquidity risk and operations risk. This could involve enhanced training
Importantly, risk teams should assess how controls or market education programs.
these risks materialize both internally and
externally. A poorly timed and ill-executed In parallel, risk teams should review new
transition strategy—both internally and amended products to make sure
and across the entire financial services they do not adversely impact clients.
industry—could potentially leave firms The outcome of this, and the fact that
with illiquid assets, higher capital charges it has taken place, should be clearly
and significant operational risk. communicated to customers and built
into outreach and negotiation strategies.

Accenture 2019 Global Risk Management Study Banking 23

Section 5 Don’t overlook LIBOR retirement

LIBOR retirement is fast

approaching. Risk managers
should act quickly or be
left behind as the rest
of the business prepares
for the transition.
Accenture 2019 Global Risk Management Study Banking 24
SECTION 6

How banks can manage

today’s major threats
There is no one-size-fits-all approach to
mitigating today’s risks, and there are no quick
wins. The picture is intricate and changing fast.

Accenture 2019 Global Risk Management Study Banking 25

Section 6 How banks can manage today’s major threats

But there are a number of steps that risk managers can take to effectively
position their business to cope with new threats. These are:

1. Map out risk 2. Prioritize data hygiene

interdependencies Smart analytical technologies such as AI and machine
Banks can no longer think about risks as isolated, distinct learning can help risk functions to detect threats.
threats: Today, everything is connected. Financial crime But they won’t work if the data that feeds into them
risk has become more complex as a result of open banking is not clean or synthesized. For example, these tools
and growing cyber security threats. And cyber threats produce a huge number of false positives if banks
themselves are now intertwined with data privacy and use different naming conventions for customers
reputational risk. The list goes on. and suppliers in different departments.

Risk managers should first map out how risks are related It is impossible to standardize data across the
before they can organize their teams to manage them. entire organization. But risk managers should still
For example, it is impossible to adequately manage implement the necessary structures and governance
financial crime without an understanding of cyber controls to keep data as clean as possible. AI tools
security risk and open banking. can also be deployed to cleanse data.

That interdependence has one obvious ramification:

Risk teams should not operate in silos. Instead, they
should draw on expertise from across the function
to truly understand how threats are interlinked.

Accenture 2019 Global Risk Management Study Banking 26

Section 6 How banks can manage today’s major threats

3. Right-size new product “For AI, machine learning

compliance to speed innovation and automation to take effect,
Traditional banks face new competition on The earlier the risk function involves you need consistency of data.
all fronts. In response, many have ramped itself in new product development Banks continue to struggle with this
up their own innovation efforts and the better. By providing early advice,
due to both the significant volumes
and sources of data across various
created innovation labs that experiment mistakes during the product
with new products and services. development stage can be avoided.
This in turn can hasten risk and systems as well as challenges with
The risk function should be called upon
at some stage to approve new products,
compliance checks when products the governance and ownership of
and it is here that tensions can surface.
are developed.
the data. It remains a critical issue
The product team is keen to release its This is not just about undertaking to resolve before you can scale
new product to the market, but the risk checks at the right time, but also about and effectively make use of
team might have hundreds of compliance
checks that have to be processed first.
automating manual work. For example,
risk teams spend a lot of time checking
smart technologies.”
the risk profile of new products and
Agility is key. Risk teams should only making sure that risky solutions are Steve Culp
process the checks that are absolutely not targeted at risk-averse clients. Senior Managing Director
essential at the early stages of product Today, much of that work can
development. An overbearing approach
Accenture Finance Services
be automated.
incorporating unnecessary checks Management Consulting and Finance & Risk
can stifle innovation and delay new
product releases.

Accenture 2019 Global Risk Management Study Banking 27

CONCLUSION

Define your
sphere of control
Unknown, interconnected risks are multiplying at a
faster rate than ever before. It is impossible to try and
control all aspects of the complex business environment
in which banks operate, and the faster that risk leaders
acknowledge this fact, the better.

Accenture 2019 Global Risk Management Study Banking 28

Conclusion Define your sphere of control

Firstly, risk functions should prioritize what matters most. Those who can draw a clear line between the factors
Taking a holistic view of the risk environment, they should
have clear criteria to gauge the value of their assets and
they control and the factors they cannot are taking
assess which are most critical to protect. an important step towards focus and prioritization.
Equally, the risk management function should focus
Secondly, leaders should prepare their function by allocating
its efforts and energy on preparation and planning,
resources smartly, embracing the latest tools and technologies,
and upskilling their people so they can wield them reliably.
rather than on prediction—so irrespective of the
cause of the issue, the bank is ready to respond
Finally, risk leaders should build a more proactive function, effectively to mitigate the impact.
diligently scanning the horizon for the next threats, as risks
evolve and approach in unfamiliar forms. Rather than plan for This is how to manage your sphere of control.
specific eventualities, they should continue to prepare for
disruption—looking outwards in every direction.

Accenture 2019 Global Risk Management Study Banking 29

References
1 
“Anti-money laundering compliance costs U.S. financial services firms
$25.3 billion per year, according to LexisNexis Risk Solutions,” Cision PR Newswire,
October 10, 2018. Access at: https://www.prnewswire.com/news-releases/
anti-money-laundering-compliance-costs-us-financial-services-firms-25-
3-billion-per-year-according-to-lexisnexis-risk-solutions-300728586.html

2 ”Europe is losing the fight against dirty money,” Politico, April 5, 2018.
Access at: https://www.politico.eu/article/europe-money-laundering-
is-losing-the-fight-against-dirty-money-europol-crime-rob-wainwright

3 “Global Debt Quickened in First Quarter, Outpacing World Economy,” Bloomberg,

July 15, 2019. Access at: https://www.bloomberg.com/news/articles/2019-07-15/
global-debt-accelerated-in-1st-quarter-outpacing-world-economy

4 
“2018 State of Cyber Resilience for Banking & Capital Markets,” Accenture 2018.
Access at: https://www.accenture.com/us-en/insights/financial-services/
2018-state-of-cyber-resilience

5 
Ibid

6 
“Accenture 2019 LIBOR Survey,” September 2019

Accenture 2019 Global Risk Management Study Banking 30

Acknowledgments
About the authors
Steve Culp Fred Kim Rafael Gomes
Steve Culp is a Senior Managing Director— Fred Kim is a Managing Director—Accenture Rafael Gomes is a Managing Director—
Accenture Financial Services, Management Financial Services, Finance & Risk, and leads the Accenture Financial Services, Finance &
Consulting and the Finance & Risk practice. Finance & Risk Banking group in North America. Risk. Based in London, he is the Regulation
Based in Chicago, Steve has more than 25 years Based in Charlotte, Fred has over 20 years of and Compliance Lead for Financial Services
of experience working with clients across multiple experience in banking, working with some of Consulting in the UK and Ireland. Rafael’s
geographies to define strategy and execute the world’s leading financial institutions. With client engagements cover regulatory
change programs across risk management and his functional experience in commercial and response, conduct and ethics, and
the broader finance function. His current focus consumer lending, risk management, process behavioral analytics in banking and capital
is to work with client leadership to help them re-engineering, operating model design and markets. He is a recognized thought leader
advance their business performance through risk data management, Fred guides and helps in compliance and a former recipient of
innovative strategies, processes and change. risk management executives transform their the Robin Cosgrove Global Prize for Ethics
Steve holds a Bachelor of Science in Finance enterprise capabilities with innovative strategies in Finance for work based on his PhD in
and Economics from Northern Illinois University and digital solutions. Fred has a BA and an conduct risk and regulatory relations.
and earned an Executive Master of Business MBA from the University of Michigan.
Administration degree at Kellogg in 1999.

Contributors: Sam Regan, Andrew Solow, Tales Lopes and Jeff Jamison

Accenture 2019 Global Risk Management Study Banking 31

About the research
The Accenture 2019 Global Risk Management Study is the sixth edition For each of the 10 risk types probed, a set of keywords were developed
of our study first published in 2009. It is based on a telephone survey to generate a risk frequency. This frequency was then divided by the total
(computer-assisted telephone interviewing, CATI) of 683 senior risk number of words available for each company across all earnings calls and
management executives conducted by Longitude Research Ltd on conference transcripts to arrive at the proportion of transcripts devoted
behalf of Accenture between March 2019 and April 2019. to a risk overall and over time. This measure was then log-transformed to
smooth out extreme values and rescaled to allow relative comparisons
Survey participants were sourced from around the world and work across risk types and industries.
in three sectors within financial services: banking (255 participants),
capital markets (201 participants), and insurance (227 participants). Finally, a normalization process was applied to generate an index of values
between 0 and 100 for each company-risk type, where 100 indicates the
To complement the survey data, Accenture applied natural language highest intensity of discussion around a risk and 0 indicates no discussion.
processing to a database of earnings calls and conference transcripts from The normalized measures are relative in nature and allow comparison of the
2010 to 2018 in order to verify financial services firms’ most pressing risks. intensity of discussions across topics as well as over time. When presenting
This analysis covered 225 firms in banking, capital markets, and insurance. the results, financial, operational, and regulatory risks were grouped into
It identifies the risk types being addressed, the intensity of the discussion, a ‘traditional risks’ category.
and how this changes over time.

Accenture 2019 Global Risk Management Study Banking 32

Contact About Accenture
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