A new survey from accounting firm Grant Thornton and the MIT Golub Center for Finance and Policy on regulatory responses in the U.S. following the 2008 financial crisis found that being in regulatory compliance has been a driver of risk management.
In a press release announcing the results of the survey of senior officers from U.S. banks, Grant Thornton and the Golub Center for Finance and Policy found that banks’ risk management functions are increasingly being used to generate more revenue, evolving to exploit emerging technologies and to cover more ranges of risk, such as non-financial risks. What’s more, the survey found that managing risk is becoming more prominent in bank cultures.
“Banks’ risk management priorities range from compliance and culture to technology and efficiency,” said Jose Molina, principal in Grant Thornton’s Financial Services industry practice, in a press release highlighting the results of the survey. “Banks recognize the potential of adopting risk management activities that add business value, but these activities have yet to evolve into sustainable business-as-usual practices.”
Another highlight from the survey, according to Grant Thornton and the Golub Center for Finance and Policy, is that there’s room for bankers and regulators to agree on regulatory reform. According to Molina, banks are likely to continue to double down on risk management by embracing the idea that risk is no longer only relegated to compliance and isolated risk management functions.
“Most banks believe they have not yet realized the full potential of efficiencies in data and risk information management. And most institutions plan to invest more in risk management functions in the next three to five years than they have in the past three years,” wrote Molina. “Three-quarters of banks expect their lines of business to assume increasing responsibility for risk management activities. The holistic embrace of risk management is more fundamental to the business of banking than almost any other industry.”