Cyber crime among top concerns of bank sector
Financial crime and quality of risk management have shot up the list of concerns to international banks.
That's according to a new survey conduced by PricewaterhouseCoopers (PwC) and the Centre for Financial Services Innovation (CFSI).
The survey, 'Banking Banana Skins 2015', identifies the current global economy as the number one concern while criminality jumped seven places, becoming the second-biggest concern.
Banking leader at PwC Ronan Doyle said that risk management has grown as a concern despite work carried out to address it.
"Although much work has been done by banks and their regulators to strengthen controls, it's a growing challenge to address the scale of risk and its ever changing nature.
"The survey shows a strong global consensus that the main threats to banking safety come from areas such as cyber crime and criminality, which has shot up the rankings quite dramatically, technology risk, and conduct practices," Mr Doyle added.
Criminality came in as the most notable mover in this year's survey, which was conducted by surveying 670 bankers, banking regulators and industry observers.
Two Irish banks were included in the survey.
Cyber crime is also proving to be more and more of a concern for banks.
As predicted, emerging markets rose up the list of concerns from 17 to 15 with particular focuses on China's prospects as well as the impact of weak commodity prices.
Shadow banking, a term that refers to non-regulated financial services, moved up the rankings from 20 to 16.
PwC's survey says that shadow banking has grown in recent times due to strong regulatory pressure put on mainstream banks.
A new entry into the survey was banks' business model, something that Mr Doyle said was consistent across all regions covered.
"Also of note is the business model, which has not previously featured. The fact that it comes in the top ten overall, and has ranked consistently high across every region we surveyed, shows it is rightly receiving a lot of thought."
Political interference fell to number five in the list and excessive regulation also fell to third in the list despite the fact that many central banks are ensuring banks keep enough capital to avoid another financial crisis. Both these changes suggest that the post-crisis crackdown on the banks is receding.
Another large riser in the list was social media. The reason cited for this was its power to damage bank reputation without sound evidence.
Conduct practices witnessed a rise from 16 to eight because of what is perceived to be banks' failure to achieve sufficient 'culture change'.
The change the survey refers to is specifically to do with the management of banks' business practices despite strong regulatory pressure and heavy fines.
Speaking in his preface to the survey, CFSI director Andrew Hilton said that some concerns were weakened by the overlap between similar categories.
"True, there has been a great deal of attention recently on China's economic slowdown - but that is not new. And the US/UK recovery, in particular, seems to be consolidating.
"Equally, my guess is that, for many respondents, 'criminality' and 'technology risk' overlapped - which would make cyber risk an even more pressing concern than this year's report suggests it is," Mr Hilton said.