Technology has driven change at a dizzying rate in the banking and financial services industries, bringing both new opportunities for growth, but also introducing new risks. Tools and processes can break, architectures can become unwieldy or unnecessarily complicated. But sitting on the sidelines is not an option if you want to remain competitive and relevant. This dual-sided coin is particularly relevant when it comes to managing technology and reputational risk.
What do banks need to know to navigate this challenge? Nearly all respondents to our 2013 Accenture Global Risk Management Research Study said they consider their risk management organizations as critical or important to helping manage reputational risk—but only 28 percent believe they have the capabilities to do so.
A variety of technologies play a significant role when it comes to managing—or being a source of—reputational risk for banks. In fact, in a research study Accenture conducted with Chartis, we noted seven specific technologies where risk needs to be recognized and managed:
- Mobile technology
- Cloud computing
- Social media
- Artificial intelligence
- Big data
- Real-time/high-performance computing
- Open source software
Many of these technologies are interconnected. For example, social media is linked to cloud computing, which is linked to mobile data. We believe the center where all these technologies intersect is around big data. These various technologies have the potential to capture, and to leverage, big data—making it the hub. Big data is also the analysis point for all the data collected from each technology.
All of these technologies carry risk, but they also offer opportunities for managing and mitigating it. How does a bank tackle it all? We believe financial companies need to revisit the sources and metrics reported via their dashboards providing group-level and end-of-day analysis of risk and exposure.
Come look at our study for more about risk and technology. For banks, it’s critical to get technology working in their favor when it comes to reputational risk.