Banking Banana Skins 2015

What risks do banks worldwide face in the current climate and how are they prioritising them?

PwC and the Centre for the Study of Financial Innovation (CSFI) have joined forces to learn what banking industry leaders see as the biggest threat. Every two years, they conduct a survey to explore the risks banks face and how prepared they are to tackle them. From the results of the survey, PwC and the CSFI have identified the 24 greatest threats to the Banking industry. Please download our report to find out what they are.

This year’s report describes the risk outlook for the banking industry in the final quarter of 2015 – a time when the global economy and its banking system were in the advanced stages of recovery from the financial crisis, but when concerns were growing about the strength of that recovery.

The previous survey, the first in the post-crisis era, showed a hardening of the view that the external risks identified were damaging, but also a lower concern with crisis-critical issues such as credit risk, capital adequacy and liquidity (which disappeared from the top ten for the first time since the crisis began). The latest survey confirms these fears. Technology and criminality risk are now in the top five, ranking alongside regulation and political interference as the top threats to the industry.  However the dominant finding is the shakiness of confidence in the macro-economic outlook where high debt, interest rate uncertainty and emerging market difficulties threaten the recovery.

Banana Skins Index

The Banana Skins Index tracks survey responses over time and can be read as an indicator of changing anxiety levels. The upper line shows the average score (out of five) given to the top risk, and the bottom line shows the average of all the risks. This year, the top risk - macro-economic risk - has risen, but the overall trend, as shown by the average of all the risks, extends the downward path it entered in 2014.