While big finance firms use smart technologies – cloud, biometrics, big data – in managing risk, skills deficiencies prevent them from optimizing their use of these tools.
Two- thirds of 475 risk management executives in the banking, insurance and capital markets sector surveyed by global professional services firm Accenture think that their workers’ skills are struggling to keep up with the technology.
Some 73% believe data increase in “velocity, variety and volume” and that this unprecedented evolution impedes the effectiveness of their risk management functions.
Existing skill sets are not quite up to par with larger, faster and more diverse information flows. Just 10% said their teams have the internal resources to carry out their risk management functions.
“As the nature of risk becomes more and more diverse and the amount and quality of data explodes, the need for the skills to bridge core risk management and new technologies is more urgent than ever,” said Steven R. Culp, senior managing director of Accenture’s Finance & Risk practice for Financial Services.
Culp added that in the past, adding talent was the simple solution to such problems.
“Now they must pivot to increase the skills of their talent to keep pace with new realities of data and technology,” he said.
Other findings include:
- Risk functions are still in early stages of adopting smart technologies, with only a minority of respondents said they are “highly proficient” in this area.
- Two-thirds (66 per cent) of respondents acknowledge a lack of the right capabilities is a barrier to adopting technologies.
- About half of this year’s study respondents said they expect to increase their use of outsourcing in areas such as technology implementation, risk reporting and risk measure calculation.
- Integration of risk across the organization is still somewhat limited. Less than one-quarter (24 per cent) of respondents said their risk management activities are coordinated across risk types; 19 per cent said the activities are coordinated across lines of business. Only 23 per cent of respondents said there is strong integration between the integration of risk and finance.
“The risk teams that will be most effective at integrating technologies like big data to recognize patterns and test hypotheses will be the ones that are best positioned to outperform their peers,” Culp said.
The preceding article was originally published on our sister site HRD Canada