Risk managers believe that adopting AI,
blockchain and RPA could have unintended consequences; 72% say that
complex risks are emerging more rapidly than their own skills are
advancing
An overwhelming majority of financial firms’ risk managers don’t
believe they can adequately assess the risks of disruptive
technologies but are open to new strategies and tools to better
manage emerging threats, according to a new report by Accenture
(NYSE: ACN).
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Percentages of risk managers who are
‘fully capable’ of assessing the risks associated with their
organization’s adoption of each of the following technologies.
(Photo: Business Wire)
The report, “Accenture 2019 Global Risk Management Study,” is
based on a survey of nearly 700 risk management executives in the
banking, insurance and capital markets sectors globally.
Among the key findings: Only 11% of risk managers describe
themselves as fully capable of assessing the risks associated with
adopting artificial intelligence (AI) across their organizations,
and even fewer said they are fully capable of assessing the risks
associated with robotic process automation (RPA) or blockchain (9%
and 5%, respectively).
The report notes that the external risk environment is becoming
increasingly complex, with risk teams realizing they must adapt
their approaches to contend with new threats and the heightened
pace of change.
For instance, nearly three-fourths (72%) of respondents said
that complex, interconnected new risks are emerging more rapidly
than ever before. At the same time, more than four in 10
respondents (42%) said that the risk function is, at best, only
somewhat effective at responding rapidly to changes in the external
risk environment.
“As the risk landscape continues to shift and evolve — with
increasing complexity in protecting against data breaches and
managing new, interconnected threats — risk managers aren’t able to
evolve at the same pace as technology,” said Steve Culp, a senior
managing director at Accenture who leads the company’s Finance
& Risk practice. “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.”
While disruptive technologies — including AI and natural
language processing — can present risks across organizations, the
survey revealed a strong correlation between the deployment of
these technologies and robust risk-readiness within the risk
function itself.
For example, 73% of respondents whose risk functions use machine
learning are satisfied with their progress during the past two
years in preparing their business for volatile future scenarios,
compared with only 45% of respondents whose functions don’t use
machine learning or advanced analytics.
Unfortunately, risk functions’ scaled adoption of sophisticated
technologies remains limited. While nearly all risk functions have
started using RPA to automate routine tasks, only two in five
respondents (40%) said they apply advanced analytics such as AI and
predictive modeling to their datasets, with only 10% applying
machine learning. The report notes that this lack of adoption is a
missed opportunity for risk functions, given these technologies’
immense potential to mitigate risk and improve risk professionals’
performance.
Data challenges impede adoption of advanced analytics
The report reveals that risk functions’ difficulty to make
better use of these technologies, particularly advanced analytics,
is compounded by data challenges. According to the study, the top
three obstacles to implementing advanced analytics across the risk
function are data residing in silos, lack of clarity around
regulation, and integration challenges with legacy systems.
Encouragingly, risk managers know that they need to improve how
they collect and analyze data to generate useful insights. For
instance, nearly two-thirds (63%) said they are improving their
ability to collect enterprise-wide data, and 66% said they are
honing their ability to analyze it. The study notes a need to
obtain traditional data faster and to draw from new data sources,
including marketing and social media, to help respond to threats
and add value across the business.
Noting that only 55% of respondents said they believe that other
functions recognize the important role that risk plays in driving
positive business outcomes, the report suggests that increased
collaboration will be essential to raise awareness for how risk
managers can add value across the organization. Encouragingly, the
risk function has improved its collaboration with the finance
function, with 75% of respondents saying they have a close working
relationship with finance.
“By improving collaboration with other business functions and
arming themselves with a broad range of data and analytics tools,
risk functions can make considerable progress anticipating,
assessing and mitigating new threats,” Culp said. “Moving quickly
will be critical, but so will taking a holistic view of the risk
landscape, prioritizing what they know, and preparing for what they
don’t yet understand to help redefine the sphere of control.”
About the Accenture 2019 Global Risk Study
The sixth edition of a study first published in 2009, the
Accenture 2019 Global Risk Management Study is based on a
computer-assisted telephone survey of 683 senior risk management
executives at banks, insurance companies and capital markets firms
globally. The survey was conducted by Longitude Research on behalf
of Accenture in March and April 2019.
About Accenture
Accenture is a leading global professional services company,
providing a broad range of services and solutions in strategy,
consulting, digital, technology and operations. Combining unmatched
experience and specialized skills across more than 40 industries
and all business functions — underpinned by the world’s largest
delivery network — Accenture works at the intersection of business
and technology to help clients improve their performance and create
sustainable value for their stakeholders. With 492,000 people
serving clients in more than 120 countries, Accenture drives
innovation to improve the way the world works and lives. Visit us
at www.accenture.com.
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Michael McGinn Accenture +1 917 452 9458
m.mcginn@accenture.com
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