Central banks have a new challenge on their radars: the task of
examining frameworks used by financial institutions to manage
non-financial risks (NFRs). The need to manage NFRs on top of
traditional financial risks has become more evident and pressing
than ever before, especially since the global financial crisis.
Why? Primarily due to a track record of losses caused by the
materialization of NFRs (e.g. cyber, reputational, conduct,
regulatory, technology and financial crime risks) rather than
traditional financial risks.
Who's affected?
In the near future, central banks may expect not only banks but
also fintechs to demonstrate how specific risks (like NFRs) are
managed by them, particularly where technology trends (such as
cloud computing, AI, third-party risk/vendor management, and crypto
& digital currencies) are involved. This may be the case for
all financial entities, but especially for global systemically
important financial institutions (G-SIFIs), other
