The Prudential Regulation Authority’s 2025 Priorities Letter emphasises the need for robust, adaptive and resilient governance, risk management, and control frameworks. CROs must ensure all risks are identified, assessed, monitored, and mitigated, aligning with regulatory expectations.
Risk management is a need and not only a requirement
Risk management for CROs in the banking sector:
Adopting AI isn’t just about technology – it’s a strategic business decision.
Chief Risk Officers (CROs) need to grapple with an increasingly complex risk universe, both in terms of the number and interrelated nature of risks. This results in a myriad of challenges, opportunities, and shifting priorities.
The introduction of AI into operations brings with it risks. As a result AI, Technology and cyber risk remains at the top of the agenda for firms in the sector.
The general consensus is that it is only a matter of time before all firms integrate AI into their day-to-day processes. However, effective risk management around AI remains uncertain.
An everchanging landscape
In 2024 alone, we witnessed continued geopolitical tensions, several devastating climate-related incidents worldwide, and significant technological advancements including in artificial intelligence (AI) and digital infrastructure, which have led to an escalating threat of financial crime.
This dynamic risk landscape, coupled with the significant level of regulatory change over recent years presents significant challenges for firms, and their Risk Functions.
Every CRO is currently going through change within their firm
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What are the top three risks for your firm?
26%
AI,Technology and Cyber risk
17%
Credit
risk
17%
Digital
transformation
Risk Embedding Levels by type of Risk
Operatinal Resilience
Model risk
Climate and ESG risk
Artificial intelligence
(AI) risk
Lack of well-developed AI strategy
25%
50%
38%
13%
56%
Show more >
The regulatory landscape is becoming increasingly complex with a growing number of ever changing requirements. This leads to firms constantly adapting their frameworks and processes to align with the latest regulatory guidance and expectations.
CROs' challenge of balancing regulatory compliance, growth and a strong risk culture
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75%
63%
25%
25%
13%
50%
25%
Not embedded
"Navigating these complexities requires a proactive approach, leveraging advanced analytics, and fostering a culture of resilience. By staying ahead of emerging threats, CROs can safeguard their organisations and drive sustainable growth".
Huseyin Sahin, Partner - Banking Risk Consulting
How can we help?
Speak to one of our specialists on how you can mitigate these risks.
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Banking and capital markets insights
Read our latest banking and capital markets insights.
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Are UK businesses prepared for AI?
We’ve measured the AI preparedness of over 300 businesses in the UK. Find out the results.
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Fairly embedded
Somewhat embedded
Fully embedded
Contact
Partner - Banking Risk Consulting
Huseyin Sahin
> Read more
What are the top risks for 2025 in the financial services sector?
We have identified the key risk areas for financial services business leaders in 2025.
> Read more
Chief Risk Officer (CRO) challenges in risk management
Read our summary of the current CRO challenges
The introduction of AI into operations brings with it risks. As a result AI, Technology and cyber risk remains at the top of the agenda for firms in the sector. The general consensus is that it is only a matter of time before all firms integrate AI into their day-to-day processes. However, effective risk management around AI remains uncertain.
Adopting AI isn’t just about technology – it’s a strategic business decision.
Operatinal Resilience
25%
Model risk
13%
Climate and ESG risk
38%
Artificial intelligence
(AI) risk
50%
Contact
Director - Financial Services Consulting
Breda Griffin
> Read more
Are UK businesses prepared for AI?
We’ve measured the AI preparedness of over 300 businesses in the UK. Find out the results.
> Read more
Banking and capital markets insights
Read our latest banking and capital markets insights.
> Read more
What are the top risks for 2025 in the financial services sector?
We have identified the key risk areas for financial services business leaders in 2025.
Operational Resilience
Board/ Senior leadership change
What are the top eight challenges banks are currently facing?
Responding to regulation and governance requirements
Full On-Site Transition
Hiring the right talent
Unforseen risks
Internally building trust
Data Transformation
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