Published: 19 March 2024
As risk appetites increase, financial institutions find their internal controls no longer align with current risk levels. Heads of ERM pursuing an upgrade to their internal controls programs can use this research to strategically target high-impact elements to align with higher risk appetites.
Fifty-seven percent of financial services boards of directors (BoDs) are increasing risk appetites for 2024 through 2025. This means organizations are likely to take on new risks or experience changes in existing riskswhich may lack or have insufficient internal controls.
Informal legacy internal control programs, developed years ago, create unmanageable inconsistencies and inefficiencies when applied to today’s more complex, interconnected and uncertain risks.
Internal controls programs born out of internal audit programs place the primary emphasis on process versus risk appetite-driven action. As such, risk responses could be misprioritized.
Identify and fill gaps in the control universe by updating
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