A KPMG survey of how banks identify, measure, and control non-financial risks.
Banks and regulators are turning their attention to non-financial risks, which can have a huge impact on a bank’s bottom line. Most attention is currently being given to IT and compliance risks whilst business and strategic risks are too often overlooked. In such a politically volatile environment European banks need to be braced for change and so strategic and businesses concerns should really be higher up the list of priorities.
Costs and charges arising from banks’ non-financial risks have increased sharply in recent years. In part this reflects the compensation and litigation costs relating to misconduct, but it has also been driven by the costs of IT failures and cyber-attacks. Recent and prospective regulatory requirements and supervisory actions not only impose additional compliance costs but also require banks to take a more strategic view of how they identify, measure and control their non-financial risks.
To better understand how banks are responding to these risks and to provide banks with an opportunity to share and compare their views with peers across the market, KPMG undertook a survey of 36 banks across Europe.
Our survey results highlight the importance of non-financial risks and the ways in which banks are identifying, measuring and controlling these risks.
We hope you find this publication insightful. If you would like further information, please contact a member of the KPMG Banking practice.