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 2021 Risk Survey—presented by Bank Director and Moss Adams—includes insights from directors, chief executive officers, risk officers, and senior executives of US banks below $50 billion in assets.
The survey focuses on the top risks facing financial institutions today.
Here's a look at some of the 2021 Risk Survey's findings, according to Bank Director.
Summary of Findings
- More Robust Stress Testing. More than 80% say their bank conducts an annual stress test. Of these, 60% have expanded the quantity and/or depth of economic scenarios examined in response to the Covid-19 pandemic.
- Cybersecurity Gaps. Sixty-three percent say their institution increased its oversight of cybersecurity and data privacy in 2020. Most say the bank needs to improve its cybersecurity program by training staff (68%) and implementing technology to better detect or deter threats and intrusions (65%).
- Pandemic Plans Adjusted. Respondents identify several areas where they’ll enhance their business continuity plan as a result of the pandemic. The majority point to formalizing remote work procedures and policies (77%), educating and training employees (56%) and/or providing the right tools to staff (55%). Roughly half say that fewer than a quarter of employees will work remotely when the pandemic abates; 25% say that no employees will work remotely.
- Banking Marijuana. Forty-one percent of respondents represent a bank headquartered where marijuana use is at least partly legal. Overall, one-third are unsure if their bank would be willing to serve marijuana businesses. Just 7% serve these businesses; 34% have discussed banking this industry but don’t work with these companies yet.
- Climate Change Still Not a Hot Topic. Just 14% say their board discusses the risks posed by climate change at least annually; this is up slightly from 11% in last year’s survey. Fewer than 10% say an executive reports to the board about the risks and opportunities that climate change presents to the institution.