Financial services firms must deal with various risks. However, some are more difficult to handle than others.
Chief among them are risks regarding cybersecurity. Of the finance professionals polled by Marsh & McLennan Advantage, a professional service firm, 53% named digital defence risks as the most challenging danger to handle, a jump from 12% a decade ago.
Strategic risks like dealing with competition and industry disruptions were named as the second most difficult type to handle, with 40% naming it as a challenge. That was followed by 35% who struggled with financial risks, 33% who said the same about political and regulatory uncertainty in the US and the 31% who pointed at macroeconomic risks.
In fact, 57% of treasury professionals were worried about upcoming economic uncertainty in the US, with 19% indicating that they are very concerned. Similarly, 58% of corporate practitioners said they were nervous about the global economy.
“While financial leaders are better prepared to manage known risks, the survey data points to the need to improve the ability to systematically identify new, emerging risks and analysis of known risks, such as cyber and extreme weather,” said Alex Wittenberg, executive director at Marsh & McLennan Advantage. “Few organisations have adopted formal processes for engaging senior leadership and the board in a discussion of how an increasingly uncertain environment will impact strategy decisions.”
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