In this episiode of the Risk Intel Podcast, host and SRA Watchtower CEO Edward Vincent invited CFO/CRO Shawn Ryan on to the show to discuss the top emerging risks facing financial institutions today. Their discussion, enriched by insights from the NC State University ERM Initiative "13th Annual Executive Perspectives on Top Risks Survey," sheds light on critical areas that demand attention from risk leaders.
Listen to the full episode below or review the summarized breakdown of these emerging risks, incorporating key findings from the survey.
By the minute, AI is revolutionizing financial services and how we do business, offering both opportunities and challenges to consider. Institutions that harness AI can achieve significant operational efficiencies, but must also navigate the associated risks. The recent NC State University ERM Initiative survey included the following key AI related risk:
As Shawn noted, financial institutions face a conundrum: “You’re damned if you do, damned if you don’t.” Avoiding AI may result in falling behind competitors, while improper implementation can lead to significant ethical and operational challenges.
✅ Pro Tip: Shawn recommended developing comprehensive AI governance policies and ensure alignment with evolving regulatory expectations.
Note: All images in this blog were generated using AI
Cyber threats are escalating in complexity and frequency, posing substantial risks to financial institutions. Some of the current cybersecurity concerns include:
Ed emphasized that cybersecurity is a non-negotiable aspect of enterprise risk management (ERM). Institutions must maintain strong internal controls and stay updated on regulatory expectations.
✅ Pro Tip: Shawn recommoned investing in top-tier cybersecurity talent, cutting-edge tools, and establish multi-layered defense mechanisms.
Attracting and retaining skilled talent is a persistent challenge, especially as the demand for specialized skills grows.
Talent-related challenges include:
The discussion highlighted that people are the cornerstone of effective risk management. Without the right talent, even the best strategies and technologies may falter.
✅ Pro Tip: Broaden recruitment efforts beyond traditional geographic boundaries and foster a culture that attracts and retains top talent.
External economic factors can significantly impact financial institutions, necessitating proactive risk management. Institutions must recognize that we may be entering a contraction phase, making proactive scenario planning essential for resilience. Some of the major macroeconomic risk factors from the survey include:
✅ Pro Tip: Utilize economic indicators and modeling tools to assess potential impacts on your institution and develop contingency plans.
Regulatory environments are in constant flux, presenting challenges for compliance and strategic planning. Shawn cautioned that “if you get loose in one administration, you could find yourself in trouble when the next one comes in.” So it's best to always stay vigilant and proactive when it comes to risk management, here are some key considerations included in the survey around managing regulatory change:
✅ Pro Tip: Shanw encouraged listeners to maintain consistent compliance practices and engage with industry groups to stay informed about potential regulatory changes.
The episode concludes with a call to action for financial leaders: cultivate a pervasive culture of risk awareness. Emerging risks are continually evolving, and institutions must integrate risk management into daily operations. This approach should be supported by continuous monitoring, scenario planning, and leveraging appropriate technologies.
As Shawn perfectly stated, “It’s not about avoiding risk—it’s about managing it.”
🎧 Listen to the full episode and subscribe to the Risk Intel podcast for more expert insights on managing risk in an ever-changing financial landscape.