We present our latest issue of McKinsey on Risk, the journal offering McKinsey’s global perspective and strategic thinking on risk. This publication focuses on the risk areas that affect the performance of the world’s leading companies, taking a truly global view across business sectors and functions. The articles offer industry insights and recount hands-on experience to highlight the strategic skills and analytical tools companies are using to transform all areas of risk management.
In this issue, the lead articles “Transforming risk efficiency and effectiveness” and “The compliance function at an inflection point” offer detailed discussions of how financial institutions can tackle the increased operational costs that came from postcrisis expansion. Through digital-based transformations to improve organization, governance, and processes, they can achieve better performance while sustainably trimming costs.
As financial institutions and corporates across sectors address the strategic imperatives of digitization and artificial intelligence, the advantages gained are accompanied by new and challenging perils. “Confronting the risks of artificial intelligence” and “Derisking machine learning and artificial intelligence” address these diverse and complex risks. From insecure data to misbehaving models, they can be mitigated with structured detection approaches, robust controls, and targeted modifications to validation frameworks.
The theme of institutional resilience in a downturn is rapidly gaining strategic importance. It is discussed in “Going digital in collections to improve resilience against credit losses” and “Bubbles pop, downturns stop.” The latter article zeros in on what distinguished resilient companies from less resilient ones in the last downturn. The former explores the meaning of resilience in the context of lenders’ credit positions and how these may be improved in advance of any future economic slowdown.
The issue concludes with “Fighting back against synthetic identity fraud” and “Critical infrastructure companies and the global cybersecurity threat,” discussions of different aspects of cyber breaches. One delves into the unique security challenges facing critical infrastructure companies, addressing how they can fight back successfully with cybersecurity transformations to protect against crippling threats. A second piece tackles the detection and prevention struggles of synthetic identity fraud, highlighting the use of data trails to stem losses from this fast-growing financial crime.
We hope you enjoy these articles and find in them ideas worthy of application. Let us know what you think at McKinsey_Risk@McKinsey.com and on the McKinsey Insights app.
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