The banking sector has consistently been one of the most promising industries in the past few decades. However, the current state of the world economy is an increasing concern for bankers. Recent market slowdowns, high debt, and interest rate uncertainties are not helping either. The advent of technology has proven to be both a boon and a bane for the banking industry, while it has many benefits of convenience and ease for both the customers and the players in the industry, technology is making the banking sector more prone to risks of security and criminality.
Are you a stakeholder in the banking sector? Then you need to stop everything you are doing right now and prep yourself to face these challenges that are charging its way towards the banking sector.
Uncertainties in the Macro-Economic Environment
Though many economies have now returned to positive growth, macroeconomic risks remain a significant concern. Some of the major issues adding on to the bottling up tension in the banking industry are – the declining Chinese economy, unresolved conditions in the eurozone, unclear state of future interest rates, the slower growth rate in emerging economies, etc.
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Rising Regulatory Concerns
The tightening regulatory requirements are leaving bankers in distress. Many players in the banking sector are of the opinion that these regulations are a costly affair that would eventually prove to be ineffective. There are increasing regulatory requirements and innovation and diversity as well especially in the case of big players in the banking industry. Over the course of time, the players in the banking industry are becoming more risk-aware. However, banks are facing trouble in their efforts to meet compliance standards as they require a sizable amount of energy, money, and time to meet them.
Increasing Rate of Cyber Attacks
The development of technology has made it easier for cyber-attackers and hackers to infect systems in the banking sector. The past decade has seen an increasing rate of cyber-crimes in the banking sector owing to the increased adoption of modern technology by banks such as crypto-currencies, real-time payments, distributed ledgers, etc. Cyber attacks that are being carried out on the banks could make them vulnerable to economic and regulatory risks and ultimately leave huge dents in their reputation.