Top 10 Risks to the Canadian Financial System for 2021: GRI Risk Outlook
8 February 2021
Economic and cyber risk top the list while climate change jumps to third place and pandemic risk joins the list for the first time in fourth spot
TORONTO, Feb. 8, 2021 /CNW/ - Economic risk and cyber risk topped the list of challenges for the Canadian financial system in 2021, closely followed by climate change, the pandemic and credit risk, according to the GRI Risk Outlook, an annual survey of leading financial institutions that are members of the Global Risk Institute (GRI).
"Some of the top risks from prior years have been impacted and, in some cases, overshadowed by events brought about by the global pandemic," said Sonia Baxendale, President and Chief Executive Office of GRI. "With that in mind, we added some new questions related to COVID-19 to gain insight into the impact of the pandemic on financial institutions and the Canadian financial system."
Among those insights is that the pandemic will continue to have a tangible impact on business operations throughout 2021. Economic risk related to the slowdown of the economy and the threat posed by COVID-19 was top-of-mind and clearly articulated by the chief risk officers in the survey.
"Cyber risk remains a top concern as a result of the pandemic with more staff working from home, more devices accessing digital banking environments, and more people shopping online," noted Ms. Baxendale.
While 78% of respondents indicated that a high impact event based on risks identified in the survey is likely to occur in 2021, 100% of them remarked that they are confident in the ability of the Canadian financial system to withstand them. In this regard, the survey notes that financial institutions have planned and are prepared for high-impact events caused by top risk factors.
"The survey shows that at a systemic level, there is high confidence in the resilience of the Canadian financial system and its ability to manage risks,'' said Ms. Baxendale.
The GRI Risk Outlook Survey asked chief risk officers at its member institutions about their perception of top risks to the Canadian financial system in 2021. Respondents, which include banks, pension funds, insurance companies, Crown Corporations, industry associations and assets mangers, completed the survey from November 2020 to January 2021.
About GRI: The Global Risk Institute in Financial Services (GRI) is the leading forum for ideas, engagement and building capacity for the management of risks in the financial services sector. We are a non-profit, public and private partnership with 46 government and corporate members from asset management, banking, credit unions, insurance and pension management. GRI's goal is to develop fresh perspectives on risks, to engage members, and to enhance risk management skills. Our activities support academics, corporations, policy makers and regulators. We take a global view of the risks facing the financial services industry from our base in Toronto, Canada.
Public Affairs Advisor, Global Risk Institute in Financial Services,
Mary Lou Frazer, Global Risk Institute in Financial Services,