Embedding robust Risk Culture in the era of heightened regulation
Risk culture is no longer a buzzword. It’s a core pillar of your stability and integrity. With regulators increasing their scrutiny, you need a risk culture that is authentic and embedded across all levels of your organisation.
A strong risk culture extends well beyond simple compliance. It embodies shared values, well-defined responsibilities, and behaviours that shape how risks are identified, managed and communicated. You are expected to have practical frameworks, clear processes and effective monitoring systems that empower every employee to engage actively in prudent risk management and ensure alignment between risk appetite and business goals.
If you overlook the importance of risk, you increase the chance of operational breakdowns, reputational damage and regulatory penalties. However, when you actively nurture a proactive risk culture, you strengthen operational resilience, support sustainable growth and set yourself up for long-term success.
Within this context, your board plays a crucial role by setting the tone from the top and embedding risk awareness within your organisation’s strategy and core values. Your board oversees risk policies and frameworks, drives accountability and fosters open communication. Through ongoing dialogue with management, your board ensures that the risk culture remains aligned with your risk appetite, supporting your long-term stability.
From mindset to action: Building the frontline of Risk Culture
Your employees represent the first line of defence in maintaining appropriate risk levels and ensuring compliance. Establishing an effective risk culture requires fostering awareness and safe behaviours that are practised daily, from your frontline staff to senior management. Relying solely on rules and controls isn’t enough; a deeper cultural shift is needed to truly embed a robust risk mindset throughout your organisation.
This cultural shift depends on appreciating the connection between mindset, behaviours and actions:
- Mindset: Your employees’ perception of risk and their role in managing it directly influences the overall level of risk awareness within your organisation.
- Behavioural Patterns: These mindsets influence how your employees make decisions every day.
- Actions and Decisions: Their behaviours translate into concrete decisions that affect your overall risk profile.
To support this cultural shift, you must implement targeted initiatives that address mindset, behaviours and actions in a coordinated way. This involves challenging your existing assumptions, optimising organisational structures and encouraging consistent behaviours that strengthen risk awareness. Through these efforts, risk management becomes an integral part of your everyday work, fostering a culture where everyone actively contributes to identifying and managing risk responsibly.
Current challenges in Risk Culture
Despite its critical importance, you may face significant obstacles when fostering a genuine risk culture. Common challenges include:
- Siloed responsibility: Risk management is often seen as the sole responsibility of compliance or risk teams, rather than an organisational-wide commitment.
- Lack of leadership commitment: Without consistent and visible endorsement from senior leaders and boards, risk culture efforts struggle to take hold.
- Insufficient awareness and training: Employees may not fully understand the importance of risk culture or how it applies to their daily responsibilities.
- Misalignment between business goals and risk management: A focus on short-term profits or growth can sometimes overshadow careful risk consideration.
- Weak speak-up culture: Junior staff or risk professionals may hesitate to raise concerns or challenge decisions due to fear or hierarchical pressures.
If you don’t address these issues, you increase your vulnerability to risks, delay responses to emerging threats, undermine stakeholder trust and expose your organisation to regulatory consequences.
A framework for success The PwC Risk Culture Model
To guide you in strengthening your risk culture, the PwC Risk Culture Model highlights four essential pillars:
- Strategy and Leadership
- Risk Environment and Risk Capability
- Accountability and Reinforcement
- Communication and Collaboration
Strategy and Leadership
Aligning your corporate strategy and values with risk objectives is essential. Your leaders must exemplify positive risk behaviours and clearly communicate their commitment, establishing a strong “tone from the top.”
We work closely with you to embed risk considerations into everyday business decisions, ensuring a consistent and aligned message delivered from your leadership that resonates throughout your entire organisation.
Risk Environment and Risk Capability
Robust systems, policies, processes and controls underpin your effective risk management. Equally important is investing in your risk capabilities through targeted training and infrastructure to enable early risk detection and mitigation.
We guide you in developing these capabilities so that employees at every level are empowered to proactively recognise and respond to risks before they escalate.
Accountability and Reinforcement
Clear role definitions and accountability structures promote positive risk behaviours within your organisation. Recognising good risk management while addressing issues and failures supports continuous cultural improvement.
Our approach helps you establish a balanced system of reinforcement that encourages ownership of risk responsibilities and drives a lasting commitment to sound risk practices.
Communication and Collaboration
Open, transparent communication channels and collaborative knowledge sharing empower your employees to speak up and work cross-functionally – fostering a comprehensive approach to risk.
We support you in creating a collaborative and transparent environment, helping you respond swiftly and effectively to emerging risks while fostering a culture of trust and shared responsibility.
By guiding you through each pillar of the PwC Risk Culture Model, we help you build resilient, risk-aware organisations. This holistic framework not only strengthens your governance but also enhances employee engagement and aligns risk-taking with strategic objectives, delivering sustainable long-term value.
Moving forward: Building your sustainable Risk Culture
As regulatory focus on risk culture increases, you need to move beyond mere formalities and build genuine, embedded risk cultures. By understanding existing challenges, applying targeted strategies and leveraging a holistic framework, particularly by emphasising the critical link between mindset, behaviour and actions, you can take proactive control of your risk environment. It has become essential to assess the strengths of risk culture – identifying areas of strength as well as opportunities for improvement. To support this process, you can leverage our PwC Risk Culture Model as a practical framework to evaluate your current risk culture and guide targeted enhancements.
This approach not only minimises regulatory and operational risks but also establishes a foundation for sustainable resilience and long-term success amid an increasingly complex financial landscape.
Where does your organisation stand on the journey toward a robust risk culture? What are your ambitions and priorities? Reach out to discover proven practices, gain market insights and align your risk culture with regulators’ expectations.
Are you ready to future-proof your organisation?
PwC is here to support you
Contact us
Partner, Leader Financial Services Risk Consulting & Internal Audit, PwC Switzerland
+41 58 792 46 28
Fabienne Wikler
Mansur Jakob