Banks urged to strengthen risk strategy as cybersecurity, credit risks intensify — EY

Banks across the world must adopt a more integrated and forward-looking approach to risk management as the financial environment becomes increasingly volatile, according to the 15th annual Global Bank Risk Management report by EY.

The report provides a comprehensive analysis of the evolving priorities and challenges facing chief risk officers (CROs) in the global banking sector, highlighting the dynamic and interconnected nature of risks confronting financial institutions.

Read also: African banks outperform peers as margins rise to 6.2%

According to the survey, cybersecurity and technology risk have emerged as the top concern for 86 percent of CROs, followed by credit risk at 62 percent and data risk at 41 percent. Digital fraud and financial crime also remain significant threats, reflecting the growing sophistication of risks in an increasingly digital financial ecosystem.

The findings underscore the urgent need for banks to strengthen governance frameworks, adopt advanced technologies, and embed risk management more strategically within their operations.

Anthony Oputa, managing partner, West Africa at EY, said the report serves as a critical guide for banking leaders navigating a rapidly shifting risk environment.

“The report serves as a vital resource for banking leaders seeking to understand and respond to the shifting risk landscape. EY remains steadfast in its mission to help financial institutions build stronger, fairer, and more sustainable businesses through innovative and integrated risk management practices,” he said.

The report reveals that CROs are increasingly playing a broader strategic role within banks, leveraging artificial intelligence (AI) and advanced data analytics to anticipate emerging risks and support more informed decision-making.

Indeed, 55 percent of CROs surveyed indicated they are prioritising AI-enabled capabilities to enhance the effectiveness of their risk management systems.

Ashish Bakhshi, Clients and Industries Leader, West Africa at EY, said the current risk environment is defined by rapid technological change and evolving regulatory expectations.

“The risk environment today is characterised by volatility and complexity, driven by rapid technological innovation and shifting regulatory landscapes. Banks must embrace a strategic mindset that balances risk mitigation with growth opportunities,” he noted.

To address these high-priority risks, 52 percent of CROs said they are focusing on strengthening governance and controls, while 43 percent are enhancing their risk identification and assessment capabilities.

Talent development is also emerging as a critical priority. The report shows 29 percent of CROs are emphasising recruitment and development of specialised risk management skills, while 71 percent say digital capabilities, including technology, data, AI, and programming, are becoming essential competencies for future risk professionals.

Abiodun Akinnusi, banking and capital markets leader, West Africa at EY, said the pace of transformation in the banking sector is unprecedented.

According to him, financial institutions are increasingly confronting not only traditional financial risks but also new challenges arising from digital transformation and changing customer expectations.

“Our clients are recognising the critical importance of integrating technology, governance and talent development to build adaptive risk frameworks. EY’s sector expertise enables us to deliver tailored solutions that empower CROs to navigate this complexity and safeguard long-term value,” Akinnusi said.

Looking ahead, the report indicates that 63 percent of CROs expect increased regulatory scrutiny, particularly around technology and AI-related risks. In addition, 51 percent foresee greater investment in risk data and analytics to meet evolving supervisory requirements.

Read also: Nigerian banks gain dollar buffers on rising FX reserves

EY noted that the current regulatory environment, characterised by fragmentation and localisation, will require banks to strengthen governance structures and operational resilience while maintaining the agility needed to compete in a rapidly changing financial ecosystem.

The report ultimately concludes that banks must move beyond traditional risk frameworks and adopt more integrated, technology-driven strategies to remain resilient in an increasingly complex global financial system.