The financial industry grapples with mounting regulatory pressures and increasingly sophisticated financial crimes, forcing institutions to strike a delicate balance between meeting compliance demands and driving business growth. As regulatory frameworks evolve and bad actors become more cunning, the stakes for financial institutions have never been higher.
During our recent webinar, “Risk is Everything, Everywhere, All at Once,” senior compliance experts from AmTrust, JPMC, and FinScan provided a deep dive into the evolving risk landscape for financial institutions, focusing on managing financial crime, regulatory pressures, and fostering organizational resilience.
This session underscored that while the risk landscape is more complex than ever, financial institutions that embrace integrated strategies, foster collaboration, and continuously adapt to change will be better equipped to navigate these challenges effectively. Here are the critical insights shared by the expert panel discussion.
Risk conversations are not broad enough
Many organizations remain siloed in their risk conversations, separating business goals from compliance and control functions. This disconnect hinders effective risk management. The best practice is to foster integrated conversations across all organizational levels. Risk ownership should be shared by the business, not confined to risk control functions alone.
Risk management should be guardrails, not constraints
Risk is often seen as a constraint that stifles innovation and business growth. However, when positioned as guardrails, risk management supports the organization in achieving its strategic goals. Align risk management practices with business objectives by embedding risk professionals into business teams and adopting a shared language for risk appetite and tolerance.
Balancing risk appetite with practical controls
Reality check: zero risk is unattainable and unsustainable. Organizations must accept that mistakes and exposures will occur, especially in areas like financial crime, fraud, and compliance. Practical controls are needed. Develop risk indicators and monitoring systems to continuously assess and adjust risk levels rather than overcorrecting with overly rigid controls.
The importance of data quality in risk screening
Poor-quality data can lead to an overwhelming number of false positives, such as screening errors due to ambiguous geographic or entity identifiers (e.g., Cuba, NY vs. Cuba the country). Companies should invest in data integrity and screening tools that prioritize actionable intelligence and reduce noise, minimizing operational inefficiencies and customer disruptions.
Empowering teams to navigate complexity
Overburdened compliance teams and inadequate cross-functional collaboration exacerbate risk management challenges. Implementing empowerment strategies can provide teams with robust training, clear decision-making frameworks, and access to tools that enable them to act confidently and efficiently in complex scenarios.
Collaboration and innovation are key
Risk professionals need to collaborate closely with business units, technology teams, and external stakeholders to develop innovative solutions that balance compliance with customer experience. By encouraging innovation, they can move beyond fear-based compliance to foster a culture where teams solve problems proactively and creatively, driving better outcomes for the organization.
Adapting to new regulations
While financial institutions may tick regulatory checkboxes, a deeper commitment to integrating resilience and forward-thinking practices is essential. Companies can use upcoming regulations as opportunities to refine governance, enhance communication, and strengthen organizational risk frameworks.
Continuous improvement is non-negotiable
Risk management is not a one-time project but a continuous process of monitoring, learning, and improving. With an iterative approach, focus areas can include developing metrics to measure risk performance, invest in training, and prioritize transparency and collaboration in decision-making.
Turning risk management into a strategic advantage
In an industry where the stakes are rising daily, the message from our webinar was clear: risk is everyone’s responsibility, not just the compliance department’s. Bridging the gap between compliance and leadership requires a fundamental shift in how organizations view and manage risk. By fostering integrated conversations, aligning risk management with business objectives, and empowering teams with the tools and frameworks they need, financial institutions can turn risk into a strategic advantage.
The evolving risk landscape demands more than just compliance—it requires resilience, innovation, and a commitment to continuous improvement. As regulatory pressures mount and financial crimes grow more sophisticated, the ability to adapt, collaborate, and innovate will separate those who thrive from those who merely survive.
Don’t miss the opportunity to equip your organization for the challenges ahead. To listen to the full discussion, check out the webinar on demand, “Risk is Everything, Everywhere, All at Once.”