Digital transformation has fundamentally changed the way companies in the financial services industry do business. The COVID-19 pandemic is further accelerating this transformation. These changes can be a boon for business in areas such as efficiency, personalization, and insights. However, these changes can be equally detrimental to companies that fail to manage the new and emerging risks these digital initiatives can bring. In today’s interconnected, rapidly transforming digital economy, holistic risk management is critical for driving business success.
Holistic risk management looks at the micro- and macro-level impact of transformation and can be critical to success in today’s interconnected, rapidly transforming digital economy. In 2018, Visa published a study, in partnership with Forrester, that took a micro-level view of digital transformation and uncovered that adopting new payment capabilities introduces significant business risk for banks, fintechs, and merchants. However, effectively managing those risks leads to greater business success in areas such as customer satisfaction, business reputation, and cost reduction.
A new study, commissioned by Visa with Forrester in 2019, takes a greater macro-level view. The online survey of 577 security and risk leaders from companies across Africa, Asia Pacific, Europe, Latin America, the Middle East, and North America explores the digital trends that are transforming the financial services market overall and the need for firms to evolve their risk management strategies with a bigger picture in mind. The research found that proper risk management, as a part of digital transformation, can bolster business outcomes, such as increased customer trust and better business planning and decision making. While Forrester conducted the research prior to the COVID-19 pandemic, we still consider the findings and recommendations to be relevant, if not more so now, as the pandemic puts greater urgency on business leaders to evolve their risk management functions to navigate a post-COVID-19 world.
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