The Institute of International Finance (IIF) and EY are proud to release our 14th Annual Global Bank Risk Management Survey - Agility in volatility: Rebalancing CRO priorities in a shifting risk matrix.
Our latest survey reveals that geopolitical risk continues to exert significant pressure on banks worldwide. For the third consecutive year, cybersecurity has retained its position as the top near-term risk. The 14th edition of this joint report, based on survey data from 115 banks across 45 countries, highlights the critical issues that banking chief risk officers (CROs) identify as the most pressing for their organizations both now and in the future.
Cybersecurity once again emerges as the primary concern long term, with 75% of CROs agreeing it is the chief risk over the next 12 months, and remains as the primary near-term concern, 87% stating it will remain so for the next three years. Operational resilience (38%) and geopolitical risk (36%) have newly entered the top three risks, reflecting the evolving landscape of challenges facing the industry.
Concerns about geopolitical risk have surged significantly since last year; 38% of survey respondents identified it as a top five priority this year, compared with only 16% last year and 28% two years ago. This trend varies by region, with 71% of CROs from the largest banks and 60% of CROs at banks in the Middle East and Africa expressing concern, in contrast to just 12% of CROs from Latin America. The challenges associated with geopolitical upheaval have prompted leaders to adopt a holistic approach to risk management, with 57%stating they will prioritize political assessments to a greater extent. As the political landscape evolves following the super-election cycle of 2024, 70% of CRO respondents believe changes in geopolitical conditions, leading to broader economic uncertainty, will impact their organizations, followed by shifts in market volatility (48%) and trade policies (45%).
The survey highlights that artificial intelligence (AI) continues to demand attention, with nearly half (49%) of respondents naming AI as a key initiative they will prioritize over the next three years. Current adoption focuses on transforming risk management practices, including data analysis (45%) and automation of operational tasks (41%). However, limited shares of budgets pose the top constraint for CROs seeking to operationalize AI, according to 41% of survey respondents, while 33% cite the scale of change required as a barrier to broader deployment. As their responsibilities expand, CROs are also managing the associated risks of AI deployment across the business, starting with the development of programs that promote responsible AI usage. Sixty percent view this as a challenge, with talent and technology following at 42%.