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Aon risk ranking flags tech, innovation fears

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Disruptive technologies and failure to innovate have debuted in the top 10 risks facing financial institutions worldwide, according to an Aon survey.

The global financial industry views damage to reputation and brand as the biggest threat, followed by regulatory and legislative changes, similar to the last survey in 2015.

Cyber crime, hacking, viruses and malicious codes rank third, economic slowdown or weak recovery is fourth and failure to innovate and meet customer needs shares fifth spot with inability to hire or retain top talent.

Rounding out the 10 are rising competition, disruptive technologies and innovation, the growing burden and consequences of corporate governance and compliance, and technology or system failure.

“The risk environment for financial institutions continues to evolve rapidly as the magnitude, scope and complexity of risk increases globally,” Aon’s Chief Commercial Officer for Europe, the Middle East and Africa Specialty Enrico Nanni said.

“In particular, reputation remains critical for financial institutions, and this is demonstrated in the continued ranking of damage to brand as the No.1 risk.

“It is also interesting to see that the evolving economic landscape and trend towards disintermediation is reflected in the entry of failure to innovate and disruptive technologies to the top 10 risks, as financial institutions grapple with rapidly changing consumer and corporate habits.”

About 24% of financial businesses worldwide have suffered financial loss in the past year because they failed to keep up with customers’ needs or provide innovative products, the survey shows.