Recent negative reports from the financial industry make it clear that banks and financial institutions urgently need strategy-oriented risk management. In a volatile environment, risk management is not merely a regulatory and compliance element, but it also becomes a decisive active design element in ensuring profitability and sustainable growth. According to the new analysis "Navigating risk" by Roland Berger Strategy Consultants, banks that implement an improved risk management strategy see their market value go up by as much as 24%. "At many banks, there is a direct relationship between the quality – i.e. the effectiveness – of risk management, and the sustainability of profit development," says Dr. Marc D. Grüter, Partner in Roland Berger's global Financial Services Competence Center and Head of the Global Finance and Risk Practice.
Successfully navigating risk requires integrating risk management into the overall strategy. A crucial aspect here is concentrating on high-risk areas, which calls for an understanding of complexity drivers and key interdependencies. "The latter is particularly difficult, since the banking environment is becoming noticeably more turbulent and challenging in a VUCA world (volatile, uncertain, complex, ambiguous)," explains Dr. Grüter.