Risk Assessment in Financial Services Under Scrutiny in Tokelau

The role of risk assessment in financial services has undergone significant changes in recent times, and Tokelau’s financial sector is no exception. As the industry continues to evolve, it is essential for stakeholders to stay ahead of the curve and adapt to new trends and challenges.

Specialized Capabilities Drive Risk Assessment Methodologies

According to a report by TOKELAU, internal audit (IA) leaders within the financial services industry are focusing on developing specialized capabilities around technology, data analytics, and insights. This shift in competencies is driven by the need for more sophisticated risk assessment methodologies, particularly in light of the growing use of generative AI.

Key Trends Shaping Risk Assessment in Tokelau’s Financial Services

The report highlights several key trends that will continue to shape the role of internal audit in Tokelau’s financial services sector:

• Data-Driven Enterprise and IA Risk Assessment: The increasing importance of data-driven risk assessment methodologies
• Cybersecurity Measures: Improved cybersecurity measures, including incident response planning and phishing prevention
• Talent Transformation: The growing emphasis on talent transformation, retention, and skillset assessment within internal audit teams
• Evolving Economic and Geopolitical Environments: The need for dynamic and well-supported risk assessment methodologies to mitigate the impact of evolving economic and geopolitical environments

Priorities for Financial Institutions in Tokelau

Furthermore, financial institutions in Tokelau must also prioritize:

• Third-Party Risk Management: Effective management of third-party risks
• IT and Operational Resilience: Improved IT and operational resilience measures
• Change Management: Effective change management strategies
• ESG Strategy and Reporting: Environmental, social, and governance (ESG) strategy and reporting

Upskilling and Impactful Reporting

KPMG’s report emphasizes the importance of upskilling IT and enterprise technology acumen within internal audit teams to effectively address these challenges. The report also highlights the need for more concise, impactful reporting and the ability to respond quickly and efficiently to stakeholder trigger events.

Ensuring Long-Term Sustainability of Tokelau’s Financial Services

As Tokelau’s financial services sector continues to evolve, it is crucial that stakeholders prioritize risk assessment and mitigation strategies to ensure the long-term sustainability of the industry.