Nashville, TN, March 29, 2022 (GLOBE NEWSWIRE) — BRENTWOOD, TENN., March 29, 2022 — Bank directorthe leading information resource for directors and officers of financial institutions nationwide, today released its Risk Survey 2022, sponsored by Moss Adams LLP. The results reveal a high level of interest rate risk anxiety as well as a lack of awareness in the environmental, social and governance (ESG) space.

the Risk Survey 2022 finds that the majority of bank directors, CEOs, chief risk officers and other senior managers surveyed are more concerned about interest rate risk than a year earlier. Why? While interest rate hikes — kicked off with a quarter-point hike announced by the Federal Reserve earlier this month — would ease pressures on banks’ net interest margins, they could also dampen demand for loans and slow economic growth. Asked about the ideal scenario for their institution, nearly three-quarters of survey respondents say they would like to see a moderate rate hike in 2022, no more than one point. This is significantly less than the 1.9% expected from the Fed by the end of the year.

“Finding the balance between increasing rates without decreasing loan volume can be an art form,” said Craig Sanders, partner at Moss Adams. “Banks with more diversified loan portfolios and those that have made the right bets on lending terms will be better placed to adapt to the new and ever-changing environment.”

The results also reveal that more than half of respondent banks are not yet comprehensively focused on ESG issues, and only 6% describe their ESG program as mature enough to publish a disclosure of their progress.

“While we see a handful of large public banks primarily focused on ESG, this is a broad issue that cuts across several important areas for community banking, including community and employee engagement, risk management and data privacy, and corporate governance,” says Emily McCormick. , vice president of research at Bank Director. “The survey reveals that banks are setting targets in these distinct ESG areas, despite the lack of formal programs or initiatives.”

Key findings also include:

Main risks
Respondents also reveal heightened anxiety about cybersecurity, with 93% saying their concerns have increased somewhat or significantly over the past year. In addition to interest rate risk, regulatory risk (72%) and compliance (65%) complete the main risks. One respondent CRO expresses particular concern about “increased regulatory expectations” regarding overdraft fees, fair lending and redlining, as well as the development of Consumer Financial Protection Bureau rules regarding the collection of small business loan data .

Improve cybersecurity oversight
Most say their bank has conducted a cybersecurity assessment in the past year, with 61% using the Cybersecurity Assessment Tool offered by the Federal Financial Institutions Examination Council (FFIEC). ) in combination with other methodologies. While 83% say their program is more mature compared to their previous assessment, there is still room for improvement, particularly in training bank staff (83%) and using technology to better detect and /or deter cyber threats and intrusions (64%). Respondents report a median budget of $200,000 for cybersecurity spending in fiscal year 2022, which matches last year’s survey.

Set ESG objectives
While most banks do not have a comprehensive ESG program, more than half say their bank sets goals and objectives in several distinct areas: employee development (68%), community needs, investment and /or volunteering (63%), risk management process and risk governance (61%), employee engagement (59%), and data privacy and information security (56%).

Protect staff
More than 80% of respondents say that at least some employees work remotely for at least part of their work week, an indicator of evolving business continuity plans: 44% identify formalization of procedures and remote work policies as a gap in their business continuity planning. , down significantly from last year’s survey (77%). Additionally, banks continue to take a carrot approach to vaccinations and boosters, with most encouraging rather than requiring their use. Thirty-nine percent require and 31% encourage employees to disclose their vaccination status.

Climate Change Gaps
Sixteen percent say their board discusses climate change every year – a subtle increase from last year’s survey. While 60% say their board and management team understand the physical risks to their bank from more frequent severe weather events, less than half understand the transition risks related to changing preferences or reduced demand for products and services as the economy adjusts.

the investigation includes the views of 222 directors, CEOs, risk managers and other senior executives from US banks with less than $100 billion in assets. Full survey the results are now available online at BankDirector.com.

About the bank manager
Bank Director reaches the leaders of the institutions that make up the American banking industry. Since 1991, the Bank’s Director has provided board-level research, insights from peers, and in-depth services to executives and boards. Designed for banks, Bank Director extends into and beyond the boardroom by providing timely and relevant information through Bank Director magazine, board education services and the industry’s leading event financial, Acquire or Be Acquired. For more information, please visit BankDirector.com.

About Moss Adams LLP
With more than 3,800 professionals in more than 30 locations, Moss Adams provides the world’s most innovative companies with specialized accounting, tax and advisory services to help them seize emerging opportunities. We serve more than 400 banks and other financial institutions at all stages of the growth cycle by helping our clients navigate an evolving regulatory environment, maintain profitability and manage risk throughout each phase of a company’s growth. their business. Find out how Moss Adams is bringing more West to business. For more information, visit www.mossadams.com/fs.

Source: For more information, please contact the Bank Director’s Marketing Director, Deahna Welcher, at [email protected]