Banks are slow to automate risk management, but a majority of those that have done so report benefits such as reduced costs, greater accuracy, increased speed and improved compliance.

Of the 300 financial services professionals surveyed by the analytics vendor SAS, 20% were at banks that have “gone further than the rest in automating risk-modeling and digitalizing risk management,” according to a white paper released today by the company. Of those, only 10% have completely automated most of their risk management activities, and only 6% have fully automated large portions of the risk modeling processes.

But those that automated noted reduced costs, according to the report, “From Crisis to Opportunity: Redefining Risk Management,” which surveyed C-level and director-level bankers from five different banking sectors in January and February.

“Along with greater insights, banks rank ‘reduced costs ‘as a leading benefit of their automation efforts. This is particularly true in risk-modeling, where more than half of those who have automated this process say they’ve experienced cost savings as a result,” the report stated.

The report also incorporates in-depth interviews with chief risk officers at the $1.96 trillion Wells Fargo, the $1.72 billion RHB Banking Group, $1.81 trillion Societe Generale and the $789 billion Standard Chartered Bank. Bank leaders such as Han Hwee Chong, chief risk officer for the Malaysia-based RHB Banking, and Mark Smith, group chief risk officer for the London-based Standard Chartered Bank, said they would like to automate but are wary of the potential expense and risk.

“We want to make sure we’re building something that is not going to be a one-off exercise, and that it is in line with the approach that we think regulators will be taking in the future,” Smith said in the report.

Standard Chartered Bank is taking a slow and steady approach to offset risks, the report noted. The bank first automated stress testing with the $959 billion Bank of England, automation that allowed the bank to reduce the stress test time from two weeks to 24 hours. The bank can now run more frequent scenarios using different inputs to map variations in outputs and obtain answers faster, the report stated.

This success is prompting the Standard Chartered Bank to try more automation proofs of concepts, Smith said.

“Not all of them will work, but hopefully the failures will be small, and we can learn from it,” Smith is quoted as saying. “It’s a mindset of continuous experimentation, rather than one big reveal.”

Bank Automation News will host a webinar on automation technology for better risk management and security on Tuesday, June 15, at 11:30 a.m. ET. Register for the webinar.