17 January 2018
Rockall is delighted to be one of six FinTechs selected by McKinsey to participate in their recent study “The future of risk management in the digital era”, produced to help organizations navigate digital risk transformation, now and in the long term.
The world is digitizing around us and, as the bank’s second line of defense, risk processes need to evolve in a fast-paced way. Banks say that they plan to digitize 80% of risk processes in the next five years. Nearly 30% of banks are already investing more than 25% of the annual risk budget to digitize risk. This report provides insights and recommendations for banks, supervisors, and fintechs on the best course to take in transforming the risk function.
Banks are increasingly engaging with fintechs to undertake vital functions including credit risk, regulatory compliance or supervisory reporting. Overall, 70 percent of survey respondents believe that fintechs will help to digitize the risk function.
“Banks face serious challenges in responding to the multi-faceted changes taking place in the risk world. Digital transformation of the risk function is inevitable and this welcome report answers many of the questions a CEO and CRO are likely to have,” commented Richard Bryce, CEO Rockall. “Despite the challenges involved, there is doubt that higher digitization enables better standardization and better control – critical success factors if the risk function is to deliver a second line of defense while addressing today’s demanding regulatory agenda.”
McKinsey’s comprehensive research included a detailed survey of more than 30 banks, extensive discussions over ten working group sessions and in-depth interviews with banks, regulators, supervisors and financial and regtech start-ups.