Article ID: e721aab39dcd6b92338cd1b7efada4b5cc67d6d961ca04bc196f58af99c72b2e
Source ID: regulatory:risk.net
Published At: -
Extraction Method: trafilatura
URL: https://www.risk.net/op-risk-benchmarking
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Risk Benchmarking Explore the data ALM inequalities In terms of core team sizes, bank ALM functions are all over the map: ranging from fewer than 10 at many large regional banks, and even some super-regionals, to 350 at one European G-Sib. At the average bank, one-quarter of staff is dedicated to setting policy, measurement and limits for IRRBB. The next biggest cluster is the 19% of staff engaged in data, technology and management information and reporting – which jumps to 25% at G-Sibs. Check out a broad selection of the data from our full 46-bank ALM Benchmarking study here: Enterprise risk Fewer than half of banks rate their GRC vendor as ‘good’ Enterprise Risk Benchmarking study shows banks juggling multiple systems, adding costs and complexity Most banks add ERM heads – but CROs keep control Hiring tilts towards AI, cyber and model risk as enterprise risk’s remit grows faster than its reach 71% of banks automate escalation of appetite breaches Automated processes are less common at banks where ERM sets overall risk appetite, research shows North American banks outpace Europeans in ERM New research shows US, Canadian banks have more developed enterprise risk management functions Operational risk Banks curb frequency of GRC vendor reviews Data shows drop in plans to pitch or switch vendors, amid tighter third-party rules – but TPRM bucks the trend In more than 90% of banks, second line tackles cyber risk But some regulators would still like to see more 2 LoD risk staffing for infosec and IT disruption Almost all banks mandate cyber security training And unlike other risks, information security coaching moves the internal confidence dial Regional banks favour scenario analysis over op risk modelling Domestic and smaller regional players favour scenarios to gauge tail exposure; G-Sibs stick to modelling, for now Top 10 Op risks Top 10 op risks: AI arms race leaves risk teams playing catch-up As firms invest for fear of being left behind, op risk managers urge caution on data, controls and access Top 10 op risks: Why cyber risk looms larger than its losses Fast-moving threat landscape and increased supplier concentration keep infosec top of the table Top 10 op risks: For change management, the cloud is its own weather front As lenders move legacy banking to the cloud, the risks of getting it wrong are exponentially greater Top 10 operational risks for 2025 The biggest op risks as chosen by senior practitioners – and what they’re doing about them XVAs Squashing CVA still dominates XVA desks’ priorities Dealers favour options-based strategies to manage charges; some explore contingent CDSs amid rising exposures XVA desks prioritise core tech upgrades over AI Vendor upgrades, cloud-native rebuilds and sensitivities tooling dominate 2026 budget road maps XVA desks target capital in optimisation runs US regulatory uncertainty leaves banks cautious on investing in new optimisation tools, Risk Benchmarking study finds Almost two-thirds of banks now run XVAs on cloud Risk Benchmarking study finds a majority of big dealers tapping cloud capacity, some exclusively, with others migrating ALM Many banks see obstacles to options-based IRRBB hedging Liquidity, accounting treatment and culture seen as impediments to wider use of swaptions, caps and floors ALM has no formal role in capital planning at a third of banks Risk Benchmarking study finds banks split three ways on policy mandates, with G-Sibs as likely as small regionals to assign ALM formal responsibility Banks hold 73% of liquidity buffer in cash and Level 1 assets, on average Largest lenders hold highest share of central bank reserves in buffer, latest analysis shows EVE and NII dominate IRRBB limit-setting ALM Benchmarking study finds majority of banks relying on hard risk limits, and a minority supplementing with early-warning indicators
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