- Chapters
- descriptions off, selected
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
End of dialog window.
Risk management for CROs in the banking sector:
An everchanging landscape
Chief Risk Officers (CROs) need to grapple with an increasingly complex risk universe, both in terms of the number and interrelated nature of risks. This results in a myriad of challenges, opportunities, and shifting priorities.
Every CRO is currently going through change within their firm
In 2024 alone, we witnessed continued geopolitical tensions, several devastating climate-related incidents worldwide, and significant technological advancements including in artificial intelligence (AI) and digital infrastructure, which have led to an escalating threat of financial crime.
This dynamic risk landscape, coupled with the significant level of regulatory change over recent years presents significant challenges for firms, and their Risk Functions.
What are the top eight challenges banks are currently facing?
Unforseen risks
Full On-Site Transition
Operational Resilience
Hiring the right talent
Internally building trust
Data Transformation
Board/ Senior leadership change
Responding to regulation and governance requirements
Adopting AI isn’t just about technology – it’s a strategic business decision.
The introduction of AI into operations brings with it risks. As a result AI, Technology and cyber risk remains at the top of the agenda for firms in the sector.
The general consensus is that it is only a matter of time before all firms integrate AI into their day-to-day processes. However, effective risk management around AI remains uncertain.
What are the top three risks for your firm?
26%
AI,Technology and Cyber risk
17%
Credit
risk
17%
Digital
transformation
Risk management is a need and not only a requirement
The Prudential Regulation Authority’s 2025 Priorities Letter emphasises the need for robust, adaptive and resilient governance, risk management, and control frameworks. CROs must ensure all risks are identified, assessed, monitored, and mitigated, aligning with regulatory expectations.
Risk Embedding Levels by type of Risk
Operatinal Resilience
25%
75%
Model risk
13%
13%
50%
25%
Climate and ESG risk
38%
63%
Artificial intelligence
(AI) risk
50%
25%
25%
Not embedded
Fairly embedded
Somewhat embedded
Fully embedded
CROs' challenge of balancing regulatory compliance, growth and a strong risk culture
The regulatory landscape is becoming increasingly complex with a growing number of ever changing requirements. This leads to firms constantly adapting their frameworks and processes to align with the latest regulatory guidance and expectations.
"Navigating these complexities requires a proactive approach, leveraging advanced analytics, and fostering a culture of resilience. By staying ahead of emerging threats, CROs can safeguard their organisations and drive sustainable growth".
Huseyin Sahin, Partner - Banking Risk Consulting
Download the report
How can we help?
Speak to one of our specialists on how you can mitigate these risks.
Breda Griffin
Director - Financial Services Consulting
Huseyin Sahin
Partner - Banking Risk Consulting
Get in touch
Contact
Contact
Discover more
Are UK businesses prepared for AI?
We’ve measured the AI preparedness of over 300 businesses in the UK. Find out the results.
Banking and capital markets insights
Read our latest banking and capital markets insights.
What are the top risks for 2025 in the financial services sector?
We have identified the key risk areas for financial services business leaders in 2025.
> Read more
> Read more
> Read more
Chief Risk Officer (CRO) challenges in risk management
Read our summary of the current CRO challenges
> Read more