Top Concerns keeping Chief Risk Officers of Banks up at night – the CRO series – Post #1
Welcome to the first post in my series on the top concerns of Chief Risk Officers (CROs) in the banking industry.
As recent events have highlighted new challenges, CROs have a lot on their plates these days.
One of the primary concerns for CROs is the rapid outflow of deposits in the digital era.
In the past, a bank run would develop over several days, but now, depositors can withdraw their deposits with just a few clicks. This has led to an increased risk of runs on banks, which can occur in a matter of hours due to the fast flow of information through social media.
To manage this risk, CROs must adopt agile risk management practices that keep pace with the highly connected, digital era in which we live.
Traditional quarterly or monthly reports are no longer sufficient to monitor and manage liquidity indicators.
CROs must also proactively monitor social media to stay up-to-date on societal events that could impact the bank’s liquidity and business environment.
In conclusion, CROs must adopt innovative risk management practices to address the challenges of the digital era.
Stay tuned for the next post in this series, where we will explore another top concern of CROs in the banking industry.
