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Andras Havas,
and Hamid Samandari
scientists with advanced mathematical and statistical knowledge will increasingly need
also to be able to work as business translators, collaborating across the bank to convert
data insights into business actions. Indeed, risk managers will become trusted counselors
to business areas (though fewer staff will be needed in traditional operational areas).
Attracting talented employees will itself be a challenge, as many potential candidates could
be lured to technology firms unless banks strengthen their value propositions. A strong risk
culturein which detection, assessment, and mitigation are part of the daily job of all bank
employeeswill be central to the success of the risk function. For despite the push toward
automation and more sophisticated analytical and technical capabilities, only human
intervention will ensure they are applied appropriately and ethically.
Fundamentally changing bank risk-management functions will take years. Now is the time to
start the transformation. Our vision for a banks risk-management function in 2025 is one where
the function is the architect of a seamless system that monitors risk throughout the organization
and makes de-biased risk decisions, that has stronger, more collaborative relationships with
other parts of the bank, and that is more engaged at a strategic level than it is today. The
actions described here are some steps risk functions can take today to move toward this vision
and to help the bank excel among its competitors.
Download the full report on which this article is based, The future of bank risk management, on
mckinsey.com.
Philipp Hrle is a director in McKinseys London office, Andras Havas is an associate
principal in the Budapest office, and Hamid Samandari is a director in the New York office.