A survey claims they are more concerned about internal disruptions than the «forever» threats of cyber and climate. 

The things that keep chief risk officers up at night in the Asia Pacific region are slightly different than those in other parts of the world, according to a recent survey conducted by Ernst & Young (EY), a consultancy, and the Institute of International Finance (IIF).

Almost two-thirds of regional CROs can’t sleep well because of the possibility of internal disruption or operational resilience while it only bothers significantly less than 40 percent of those farther afield in other parts of the world.

Concerned about Cyber

The second concern was cybersecurity, with more than half rating that as the most important risk, followed by liquidity risk (45 percent), environmental risk (36 percent), and regulation implementation (36 percent).

Globally, however, cybersecurity is what prompts insomnia in almost three-quarters of all CROs, followed by regulation (36 percent), operational resilience (33 percent), liquidity (33 percent), and risk appetite (32 percent).

Geopolitical Troubles

«Geopolitical risk is an issue that isn’t likely to go away any time soon, so banks in Asia and around the world are keeping a close eye on that because of the different ways it might impact their operations and business going forward. That could range from potential cyber warfare between nations to disruptions in global trade, for example,» David Scott, EY’s financial risk management leader for Asia Pacific said in a media release.

The survey also maintained that although CRO priorities shift from day to day, both cyber and climate have become so-called «forever» threats and are unlikely to reach a point of stability or manageability that risk departments would like to see.

Artificial Intelligence

The CROs were also asked about how machine learning, artificial intelligence, and generative AI tools were being used at their institutions.

Globally, almost half said they were used to identify fraud, with 43 percent indicating they were used to automate operational tasks such as client onboarding, 34 percent for data analysis (including anomaly detection), 33 percent for client selection, and 26 percent for the automated analysis of documents.

Fraud and Compliance

«For risk teams, AI usage is oriented toward operational risk and fraud (cited by 56% of respondents), credit risk (54%) and compliance including financial crimes and consumer compliance (50%),» the report indicated.

The survey polled 85 financial institutions in 30 countries, of which 14 percent were headquartered in Asia, 20 percent in Europe, 14 percent in Latin America, 18 percent in the Middle East and Africa, and 34 percent in North America. The proportion of globally systemically relevant banks in the survey was 12 percent.