SAS survey: 80% of Singapore banks will invest in risk technology transformation amid unyielding headwinds

Global survey of risk executives by FT Longitude and SAS shows a dramatic surge in risk management IT infrastructure and solutions investment as banks face formidable macroeconomic strife

Singapore – The banking industry faces a new era of volatility and uncertainty in 2025. Credit risk looms large amidst geopolitical tensions and the squeeze of inflation. Regulatory change and complexity abound. FT Longitude and data and AI leader SAS has recently published a global risk management survey.

The new benchmarking report, Transforming Risk Management, is based on insights shared by 300 senior banking risk management leaders in 25 countries, surveyed in October 2024.

A follow up to a similar joint study published in 2021, this latest report shows a rise in banking leaders’ prioritisation of risk management innovation, underscoring the critical role of technology in helping banks overcome adversity and build resilience.

Key takeaways

SAS has also published a data dashboard that allows users to explore the study’s findings by region, including data from Singapore institution type and asset size. Available at SAS.com/risksurvey, the tool adds depth to five overarching study findings:

Singapore data

• Investment in risk technology capabilities will grow significantly in the year ahead.
  • In addition to the burgeoning investment in technology infrastructure and third-party software noted previously, 70% of Singapore banks plan to engage third-party consultancy and advisory services.
  • ALTERNATIVE:
  • 80% of Singapore banks surveyed anticipate increasing risk technology infrastructure investment.
  • On top of burgeoning investment in risktech infrastructure, 70% of Singapore banks plan to increase spending on third-party software that helps automate aspects of their risk management processes, 30% of them significantly.
  • Additionally, 70% of Singapore banks plan to engage third-party consultancy and advisory services.

• Risk modelling is a foremost focus for banks as they contend with regulatory change and seek to automate risk processes.
  • 60% of Singapore banks plan to advance their risk modelling capabilities over the next two years.
  • 50% of Singapore banks indicated that their approach to risk management is driven primarily by external regulatory requirements rather than internal business goals.
  • Top factors influencing an organisation’s approach to risk modelling include climate risk (80%), profit and loss forecasting improvement (80%) and the volatile macroeconomic environment (60%).

Global Data

• The use of AI, including newer generative AI tech, remains mixed, despite the great promise and potential. Only a minority of global banks report widespread use of AI for functions like risk management (40%), risk modelling (30%) and fraud detection (36%).
  • Fewer still report using GenAI for these functions: risk management (17%), risk modelling (16%) and fraud detection (24%).
  • APAC banks use AI and GenAI the least among American and EMEA banks for these functions.
  • A lack of skilled talent is the top barrier to fully adopting AI, cited by 50% of global respondents across regions.
• As banks face a veritable data explosion from multiple sources, effective data management and data governance frameworks have never been more essential.
  • The global executives surveyed see improved risk management (64%), improved customer experience (55%) and improved fraud detection (51%) as top benefits for consolidating customer data.
  • Yet only 14% globally intend to significantly consolidate customer data, and fewer than half (44%) say the same for non-customer data. Of note, data consolidation plans vary considerably by region and assets under management.
• Banks of all sizes, and in all regions, continue to grapple with their asset liability management (ALM) systems and capabilities – and most plan to enhance them.
  • Only about 1 in 5 global risk execs surveyed report they are “very satisfied” with their ability to manage liquidity risk (22%) or with their ALM systems (20%).
  • Roughly 8 in 10 globally report they are either implementing next-generation ALM solutions (38%) or making comprehensive enhancements to their ALM functionalities (41%).
  • Overwhelmingly, integrated balance sheet management (IBSM) is a high aspirational goal of surveyed executives; 77% plan to invest in IBSM that enables them to better assess the impact of interest rate risk and credit risk.

“With risks impacting financial institutions more interconnected than ever before, firms need a singular, AI-powered platform that allows them to evaluate risks across the balance sheet and perform more holistic stress testing,” said Stu Bradley, Senior Vice President of Risk, Fraud and Compliance Solutions at SAS. “Those that replace outdated systems and infrastructure with a more integrated, enterprise-wide approach will see benefits across functions and enable better, more strategic decision-making.”

“Our research finds that banks took some vital steps forward over the past three years to build resilience,” said Thomas Sturge, Group Editor at FT Longitude. “But they can’t get caught comfortable. Ongoing turbulence means they must constantly modernize, improve and transform how they detect, manage and mitigate risk. Those that do will be rewarded not just with improved resilience, but also greater customer satisfaction and, ultimately, revenue.”

In-depth interviews with risk management executives at large multinational banks add rich context to the survey data. The report features perspectives from risk officers at Commerzbank, Capital One, General Bank of Canada and Santander Portugal.

“We’re looking to introduce AI in the next 18 months to make risk, fraud and [anti-money laundering] AML processes more efficient,” added Ratul Ahmed, Divisional Board Member for Group Model Risk Management and Validation, Commerzbank. “The technology can help with document scrubbing and gathering and assessing data. We’re also seeking to automate various tasks, especially in model validation, to free up the team’s time for more complex tasks.”

Go beyond the key takeaways and discover how banks are transforming risk management by downloading the latest collaborative research report by SAS and FT Longitude at SAS.com/riskreport.

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