With so many disruptive factors rolling into 2023 from the previous year, such as high inflation, the Russian-Ukraine conflict, stock market downturn, it has significantly affected the risk profile of banks and other financial services firms. Organisations now need to get on the front foot with their risk management frameworks and take a holistic approach to managing this, to help create sustainable growth.

Risk functions are changing in parallel with the market conditions. As volatility and uncertainty increases, they have added an additional layer of complexity to the process. Banks must be able to identify and respond to emerging threats and implement change in a way that minimizes their impact on the bank's risk profile.

Embedding change in a highly regulated banking/financial services environment is a complex and challenging task due to the stringent regulations and risk management protocols that must be adhered to. The banking industry is one of the most heavily regulated industries in the world, and the implementation of change must be carried out with utmost care to ensure that all regulations and standards are met.

People change is another crucial challenge in the embedding risk frameworks and changing the way in which the business treat threat culturally in a banking environment. Changes to employees’ ways of working and accepting new processes and procedures can be debilitating for individuals, and without a strong focus on Change Management, this can stop progress in its tracks.

Banks are large organizations with a sizable number of employees and change often requires a cultural shift in the way that employees work. This can lead to resistance from employees who are used to working in a certain way, and it can be difficult to overcome this resistance to ensure the successful implementation of change. This may happen fast or slow but needs to be a journey.

With the above in mind, there is a developing trend when recruiting in Risk that potential employees need to have a growth mindset and be accepting of change and transformation. I think someone once said, “the measure of intelligence is the ability to be able to change”.

How can Banks control this?

Resilience is a key factor in overcoming these challenges. Banks must be prepared for the shift and have the capability to adapt to new situations and circumstances. This requires a culture of continuous improvement and a commitment to investing in training and development programs for employees to help them stay ahead of the curve.

In conclusion, embedding change in a highly regulated banking environment is a complex and challenging task, but it is also an opportunity for growth and improvement. Banks must balance the need for change with the need to maintain the stability and security of customer funds. The role of risk management, people change and resilience are all critical components of the change process, and their successful management is essential for the long-term success of the institution.