Latest finance industry risk concerns revealed

As 2016 gets underway, a new report has revealed the latest concerns of chief executives in the global financial industry, which indicate that there could be an increase in hiring for financial risk specialists in the near future.

 

The Q3 2015 Systemic Risk Barometer Survey from the Depository Trust & Clearing Corporation (DTCC) reveals that the risk profile of the finance industry has increased over the past six months, with a ‘high-impact event’ potentially set to affect the sector this year.

 

In particular, risk managers are especially concerned about the onset of such an event, with 61 per cent believing that the probability of this has risen since the summer in comparison to the average of 45 per cent.

 

But why exactly is this the case, and what does it mean for the global financial industry in the future?

Which risks are financiers most concerned about?

Cyber security risks are a particularly prevalent concern among managers in the finance sector, with 70 per cent of the 400 questioned by DTCC putting this in their top five worries for the months ahead. Respondents based in North America were most concerned about IT security, with 77 per cent listing it in their top five.

 

The second biggest risk worry for financiers was geopolitical changes, with half of finance managers about how international relations will affect their businesses and the wider industry over the coming year. European firms were particularly concerned about this.

 

Next on the list was the potential impact of new finance sector regulations, which was a concern for 41 per cent of respondents – something that influenced another top five worry: market liquidity. Some finance managers were wary that over-regulation would prevent the sector from operating flexibly, causing further problems in the long run.

 

Furthermore, a lot of respondents said they were worried that an economic slowdown outside of Europe or the US would present them with operational challenges over the next 12 months.

 

However, action is being taken to address these worries, with many businesses upping their spending on risk management as a result.

 

Mark Clancy, chief executive of Soltra – a venture managed by DTCC along with the Financial Services Information Sharing and Analysis Center – commented: “When it comes to fighting cyber risk specifically, we’re seeing a lot of market participants collaborating to a greater degree than in the past.

 

“More and more firms are aware of how information sharing can help prevent and minimise incidents while making it more expensive for hackers to be successful. This is one area where resources are being allocated.”

How will this impact recruitment?

With an increasing focus on collaboration to fight risk, demand for both cyber security specialists and risk management experts may increase in the finance industry over the course of 2016.

 

Overall, almost three-quarters (72 per cent) of survey respondents said their business has increased its resources dedicated to identifying, monitoring and preventing systemic risks over the past year, indicating that this trend will continue even further during the next 12 months.

 

Our Market Reports combine our review of the prevailing conditions in the security recruitment market  together with the results of our 2015 employer survey. We look to analyse and discuss the latest trends in the security recruitment market.