Deloitte: More Risks On More Fronts: Credit Risk, ESG and Cybersecurity Top Concerns for Financial Institutions.

• Date: 08 February 2021

With economies contracting and unemployment rising, credit risk has moved to the top of the risk management agenda, according to Deloitte's biennial survey on the state of risk management in the financial services industry globally.

Twenty percent of the chief risk officers at financial institutions surveyed identified it as the No. 1 risk they see increasing in importance for their business over the next two years, a plurality among 16 different risk categories. That is a sharp increase from 3% in 2018.

In addition, 62% of those senior executives surveyed by Deloitte said that credit risk measurement will be either an extremely or very high priority for their institutions over the next two years. Credit risk management is the practice of mitigating losses by understanding which potential clients may come at too high a risk and above an institution's pre-identified risk tolerance at any given time. The areas that are tipped by senior executives as being particularly challenging for their institution to measure include collateral valuation, commercial credit, commercial real estate, unsecured credit, leveraged lending and middle-market lending.

"Financial institutions are seeing more risk from...