“Technology risk” has replaced “recession risk” as the top priority for chief risk officers at financial institutions, according to a new survey by the Risk Management Association and global management consultancy Oliver Wyman. When polled last year, CROs cited preparing for a possible economic recession as their major focus, but the category didn’t make the list of top five priorities in 2023. Technology risk was their top priority, followed by strategic risk or disruption, wholesale credit risk, cyber risk, and a tie between risk culture and issues around operating models.
The failures of Silicon Valley Bank and Signature Bank earlier this year drove CRO concerns about liquidity and the speed of deposit outflows in a digital age, according to the survey. Banks were also focused on bolstering their treasury risk management capabilities in response to the failures, with a focus on preparation for a wider range of outcomes. About 90% of respondents said their institutions plan to upgrade at least one core treasury risk management capability, and two-thirds plan to update at least five core treasury risk capabilities.
CROs indicated that the greatest proportion of their time—roughly half—is spent on non-financial risk, with much of that time focused on compliance and operational or resilience-related topics, according to the survey. The rest of their time is split, on average, between financial risks (about 30%) and enterprise, strategic and other risks (about 20%).
