2019 Risk Survey

Financial institutions face an increasing number of industry risks—making it more and more important for executives to identify and address potential threats before they negatively impact their business.

The 2019 Risk Survey—presented by Bank Director and Moss Adams—includes insights from directors, chief executive officers, and senior executives of US banks with more than $250 million in assets.

According to the survey, the concerns of top executives often align with key priorities identified by banking regulators: cybersecurity, compliance, and strategic risk.

Here's a look at some of the 2019 Risk Survey's findings, according to Bank Director.

Summary of Findings

  • More banks are hiring chief information security officers.
  • Cybersecurity may be addressed within the risk committee (27 percent), the technology committee (25 percent) or the audit committee (19 percent).
  • Three-quarters of respondents reveal enhanced concerns around interest rate risk.
  • Fifty-eight percent expect to lose deposits if the Federal Reserve raises interest rates by more than one hundred basis points (1 percentage point) over the next 18 months. Thirty-one percent lost deposit share in 2018 as a result of rate competition.
  • The regulatory relief package, passed in 2018, freed banks between $10 billion and $50 billion in assets from stress test requirements. Yet, 60 percent of respondents in this asset class reveal they are keeping the Dodd-Frank Act (DFAST) stress test practices in place.
  • For smaller banks, more than three-quarters of those surveyed say they conduct an annual stress test.
  • When asked how their bank’s capital position would be affected in a severe economic downturn, more than half foresee a moderate impact on capital, with the bank’s capital ratio dropping to a range of 7 to 9.9 percent. Thirty-four percent believe their capital position would remain strong.
  • Following a statement issued by federal regulators late last year, 71 percent indicate they have implemented or plan to implement more innovative technology in 2019 to better comply with Bank Secrecy Act/anti-money laundering (BSA/AML) rules. Another 10 percent will work toward implementation in 2020.
  • Despite buzz around artificial intelligence, 63 percent indicate their bank hasn’t explored using AI technology to better comply with the myriad rules and regulations banks face.

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