By Favour Pius
Banks across the world are overhauling their risk management frameworks as cyber threats, digital fraud and mounting credit pressures reshape the global financial system, a new report by Ernst &Young EY has revealed.
The firm’s 15th Global Bank Risk Management Survey unveiled yesterday shows that cyber security and technology vulnerabilities now rank as biggest risk facing banks globally, with 86 per cent of Chief Risk Officers (CROs) identifying them as their primary concern amid the rapid expansion of digital banking and financial technology.
The report also highlights renewed concerns around credit risk, cited by 62 per cent of CROs, reflecting softer global economic conditions and the rapid growth of private credit markets, while 41 per cent pointed to data risk as another major challenge confronting financial institutions.
According to the survey, the increasingly complex and interconnected risk environment is forcing banks to rethink traditional risk management models and intergrate risk oversight more deeply into strategic decision-making.
Managing Partner of EY in West Africa, Anthony Oputa, said the findings underscore the urgent need for banks to adopt a holistic and forward-looking approach to risk governance.
“The risk landscape confronting financial institutions is evolving rapidly. Banking leaders must now embed risk management at the heart of their business strategy to navigate volatility and safeguard long-term value,” Oputa said.
Industry analysts say the findings reflect the profound transformation taking place within the global banking sector as financials adapt to digital disruption, geopolitical tensions and heightened regulatory oversight.
A banking analyst in Lagos noted that the surge in digital financial services has significantly widened the threat landscape for banks, particularly in areas such as cyber security, fraud desertion and data protection.
“As banks digital operations and expand online services, they inevitably face higher exposure to cyber attacks and sophisticated fraud schemes. Risk management is no longer just about credit or market risks it now includes technology, data and operational vulnerabilities,” the analyst said.
Head of Clients and Industries Leader at EY West Africa, Ashish Bakhshi, said today’s risk environment is defined by volatility and rapid technological change, requiring banks to strengthen governance while investing in innovation.
“Banks must adopt a strategic mindset that balances risk mitigation with growth opportunities. This requires stronger governance frameworks, advanced technologies and right talent to manage emerging threats,” Bakhshi said.
The report shows that financial are increasingly deploying advanced technologies to improve risk oversight, with 55 per cent of CROS prioritizing artificial intelligence- enabled capabilities to enhance predictive analytics and real-time risk monitoring.
To strengthen resilience, 52 per cent of surveyed CROS said their organizations are focusing on improving governance structure and internal controls, while 43 per cent are enhancing risk identification and assessment capabilities.
Talent development is also emerging as a key priority for the future of risk management. The survey found that 29 per cent of CROs are prioritizing the recruitment and development of specialized skills, while 71 per cent identified digital expertise including data analytics, artificial intelligence and programming as critical capabilities for next-generation risk professionals.
Banking and Capital Markets Leader AT ey West Africa, Abiodun Akinnusi, said the pace of change within the financial services industry has created a more complex environment for banks.
“Financial institutions today face not only traditional risks but also emerging challenge linked to digital transformation and evolving customer expectations,” he said. “Integrating technology, governance and talent development is essential for building adaptive risk frameworks capable of navigating this complexity.”
Looking ahead, the reort indicates that regulatory scrutiny is expected to intensify, particularly around technology and artificial intelligence-related risks, with 63 per cent of CROs anticipating stronger supervisory focus in these areas.
In addition, 51 per cent expect increased investment in risk data infrastructure and analytics capabilities as regulators demand greater transparency and operational resilience from financial institutions.
Industry experts say banks that successfully integrate technology-driven risk management with strong governance and skilled talent will be better positioned to withstand future shocks and sustain growth in an increasingly volatile global financial environment.
