2018 Financial services risk culture survey

Is your risk culture where it should be? To stay out of the headlines, financial services firms should identify, monitor, and manage their risk culture.

Management means what it says

Our survey shows an increase in how banking professionals feel management’s actions have aligned with their risk related communications—across job levels and across time.

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Banking professionals know the consequences of “bad actors”

The vast majority of managers say they’re fully aware of the personal consequences of bad behavior. But VPs, directors and the C-suite are a bit less sure.

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Better understanding of products and services

Are products and services sufficiently analyzed for risks? Far more banking professionals said so in every country we surveyed. Australia reported the greatest jump (+35%).

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Employees feel more comfortable escalating business risks

The vast majority of Australian and US respondents feel encouraged to escalate business risks to management. Other regions were less upbeat, so there’s room to improve.

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Money isn’t everything: Employees lean toward intangible rewards

Sixty percent of our respondents say they’re driven by tangible financial rewards (e.g. bonus and stock options) over intangible rewards (e.g. recognition, career growth, job variety)—a sharp drop from 2014’s 78%. Money still matters most to C-suite executives.

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Performance reviews and goal setting exercises aren’t going far enough with compliance targets

The good news: Most survey respondents indicate that their firms embed compliance with risk procedures in the annual goal setting process. From 2014 to 2018, the percentages around performance reviews and annual goal setting nudged up from 73% to 77% and 64% to 73%, respectively. The bad news: It should be 100%. A sizable number of firms still miss this key opportunity to tie risk management procedures to performance and how that performance is then achieved, which reinforces the individual responsibility and likelihood of compliance.

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Shifting priorities: Core values versus business performance

Our respondents feel that most institutions around the world encourage actions that are consistent with firms’ core values. In the UK, though, we saw a significant drop on this measure, from 88% to 76%, and in Hong Kong and Singapore, little progress from 72% to 75%. There are still opportunities to improve end-to-end compliance processes, and ways to add transparency around how violations are addressed.

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Fewer career prospects for risk management staff

More respondents now feel there aren’t enough career development opportunities for risk personnel. In Hong Kong and Singapore, only 64% of respondents now feel they can find internal opportunities, down 19% from 2014. The UK also reported a large dip.

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Here are five actions you can take to improve your organization’s risk culture today

  • Identify gaps and weaknesses: Review your risk culture framework and make sure it covers a broad but realistic set of dimensions, including elements of leadership, governance, talent, communication, and global operating norms. If your firm doesn’t already have such a framework, you could be behind.
  • Focus on critical needs: Baseline your understanding of your organization’s risk culture. Determine the root causes of any real differences in risk culture across geographies, functions, lines of business, and how they change over time. Direct your attention toward improving any areas that are lagging.
  • Face the facts: Is there a disconnect between your firm’s compliance culture and decisions your employees make on the job? Is management consistent across the globe? Getting the answers to these tough questions can show you the way to making improvements in your culture.
  • Put risk culture communications on "repeat": When it comes to explaining your risk culture to stakeholders, any amount of communication is never enough. Repeat your messages through various communication vehicles. Your cadence and style can have an effect on how employees hear what you say.
  • Your people come first: Investments in risk culture can improve the overall employee experience. But, if you want to keep the talent you are developing, you may need to think creatively about how you provide internal opportunities.

Contact us

Bhushan Sethi

Joint Global Leader, People and Organization, PwC US

Dietmar Serbee

Leader, US Risk & Regulatory, PwC US

Alexandra Hom

Manager, People & Organization, PwC US

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