Banks are rethinking risk management. Cyber threats, fraud, and AI-related risks are growing more complex and interconnected, while a perceived shift toward less prescriptive regulatory supervision is creating opportunities to transform how risk functions operate. For banking leaders, the challenge is clear: How can they turn this moment of change into stronger oversight, faster decisions, and greater resilience?
The 2027 Risk Outlook Survey, written in collaboration with ProSight Financial Association, gathers insights from 160 senior risk decisionmakers at North American banks, revealing how they're responding to these pressures. Building on results from the 2026 Risk Outlook Survey, this year's findings highlight where institutions are embracing AI, strengthening capabilities, and laying the groundwork for transformation.
Regulatory flexibility is creating opportunities for banking risk transformation
Nearly 80% of survey respondents say they believe regulatory requirements are becoming less prescriptive. This perceived shift is providing them greater flexibility to rethink established risk management processes and prioritize more meaningful outcomes.
Institutions are responding by simplifying workflows, introducing automation, and eliminating duplicative reviews. Their focus extends beyond cost reduction to speed and quality improvements, allowing professionals to attend to emerging threats and higher-value decisions.
AI is reshaping risk management while introducing new challenges
Technology and cyber risks continue to dominate banks' priorities, followed by fraud, financial crime, and data privacy. AI is adding complexity to this landscape, creating new vulnerabilities even as it offers opportunities to improve risk detection, assessments, and monitoring.
Already, 64% of institutions are using AI within their risk functions, with banks increasingly exploring technology-enabled approaches across cybersecurity, operational resilience, financial crime, and credit risk. Yet governance frameworks, controls, and infrastructure are struggling to keep pace with adoption. As AI capabilities expand, institutions face growing pressure to strengthen oversight, establish accountability, and demonstrate the value of their investments.
Stronger foundations are key to AI-driven banking risk transformation
Despite growing adoption, data quality and availability remain the biggest obstacles to broader AI deployment, alongside technology infrastructure and worker knowledge. Without reliable, accessible data, even advanced AI tools may struggle to deliver trustworthy insights. Addressing these challenges is essential to building more effective, tech-enabled risk management capabilities.
The real test for banks will be whether transformation leads to better risk decisions. Faster threat detection, clearer visibility into exposures, and more time for informed judgment will be key measures of progress.
By shifting focus from routine activities to emerging and interconnected threats, risk functions can play a more strategic role, helping banks anticipate challenges and navigate uncertainty with greater confidence.
