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We believe that by 2025, risk functions in banks will likely need to be fundamentally different than they are today. Our forecast is that the next ten years in risk management may be subject to more transformation than the last decade. And unless institutions start to act now and prepare for these longer-term changes, they may be overwhelmed by the new requirements and demands they will face.

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The structural trends that are driving many of these substantial shifts stem from multiple sources.

•Regulation will continue to broaden and deepen as public sentiment becomes less and less tolerant of any appearance of preventable errors and inappropriate business practices.

•Simultaneously, customers’ expectations of services will rise and change as technology and new business models emerge and evolve.

•New players will enter the fray like Amazon, Berkshire Hathaway & JPMorgan Chase entering Healthcare

•Risk functions will also have to cope with the evolution of newer types of risk (e.g., model, contagion, Blockchain, Bitcoin and cyber)—all of which require new skills and tools. Fortunately, evolving technology and advanced analytics are enabling new products, services, and risk-management techniques, while de-biasing approaches that improve decision making will help risk managers make better choices about risks.