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| McKinsey Classics | June 2022 |  |
| Banks exist to lend, and every lending decision is a risk decision. That’s why the basic trends and responses in bank risk can reveal the future of the risk function throughout big business. In 2016, McKinsey published an article explaining these trends and their impact. It’s well worth reading today. | | The first big trend in risk is that governments, after spending billions of dollars to bail out banks and other big companies, have become much less willing to accept it. In fact, financial institutions not only face stricter regulation at home but must also comply with it wherever they operate. The recent sanctions against Russia, for example, cover banks and the companies that use them. That means all companies. | | The second trend is the rise and proliferation of risky customer expectations. As new companies (in banking, the fintech companies) challenge incumbents, customers of banks and other businesses have come to expect intuitive, seamless experiences; services at any time on any device; and instant decisions. The risk function will have to manage the dangers. | | To learn more about these and other trends and how companies can respond to them, read “The future of bank risk management.” | | — Roger Draper, editor, New York | |  | | | | Did You Miss Our Previous McKinsey Classics? | | | | | Simple communication tweaks based on behavioral research can nudge employees into top form and create a more productive environment for everyone. Read our 2016 classic “How small shifts in leadership can transform your team dynamic.” | | | | | | McKinsey Insights - Get our latest
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