Operational risk is facing a renaissance and could dominate the risk agenda of financial institutions for the next decade, says Hank Prybylski, global head of financial services risk management at Ernst & Young
Firms face a much increased regulatory burden with a growing emphasis on consumer protection that chief compliance officers must match. Regulatory attention in areas such as money laundering and tax evasion is forcing improvements in transaction surveillance. And firms must also standardise their approach to defining risk culture in the aftermath of episodes such as the Libor-fixing scandal.
Meanwhile, firms must also be mindful of the cost of controls. Efficient management of compliance frameworks and the optimisation or consolidation of controls will differentiate some firms over the coming years.
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