Financial Markets Standards Board (FMSB) has today published a Spotlight Review, Non-Financial Risk (NFR): Enterprise-wide risk management approach, examining how firms across wholesale financial markets are managing non-financial risk (NFR), the challenges posed by an increasingly complex operating environment, and the practices that underpin more effective risk management. The Spotlight Review draws on insights from senior practitioners across FMSB’s membership, gathered through the NFR Working Group, and includes case studies illustrating how these risks can play out, and be managed, in practice.
NFR – covering risks relating to technology, governance, conduct, culture and third-party dependencies – can have significant prudential, financial and reputational consequences, reinforcing the need for a more integrated and forward-looking enterprise-wide risk management approach. While firms have strengthened frameworks and controls in recent years, the Spotlight Review finds that many continue to face challenges managing NFR holistically across their organisations in practice. It concludes that, in an increasingly complex environment, effective NFR management depends as much on a fit-for-purpose control environment as on embedding clear ownership, integrated decision-making and sound judgement into how business is conducted every day – enabling firms to identify risks earlier, respond more effectively and build long-term operational resilience.
Darren Jarvis, Head of Non-Financial Risk at Citi and Chair of FMSB’s NFR Working Group, said:
“The operating environment for non-financial risk is evolving quickly, and no single firm can meet these challenges in isolation. FMSB provides a valuable forum for practitioners to compare notes, challenge each other’s thinking and raise standards collectively.
This Spotlight Review points to real opportunity: firms that build clearer ownership, bring risk thinking closer to the point of decision, and strike the right balance between controls, behavioural capability and judgement are better placed to spot risks earlier and respond with confidence — turning non-financial risk management into a source of operational resilience, strategic advantage and sustained performance. I would encourage firms to use this Review not just to benchmark themselves, but to rethink their approach to non-financial risk — one that is genuinely forward-looking, integrated and enterprise-wide.
This work came together because of the candour and rigour the Working Group brought to it, and I’m genuinely grateful to every member who contributed.”
Myles McGuinness, CEO, Financial Markets Standards Board said:
“We are grateful to Darren and all our NFR Working Group members for the expertise and time contributed to this Spotlight Review. Non-financial risk remains an important area of focus for firms and regulators, and this kind of practitioner-led work reflects the value FMSB can add in supporting industry dialogue on these issues. I hope it gives the industry a practical and valuable reference point for firms to continue working with each other and strengthen how they manage non-financial risk individually and collectively.”
Drawing on discussions with practitioners, the Spotlight Review sets key principles that differentiate most effective non-financial risk management:
- Clearer end-to-end ownership
- A better balance between controls and judgement
- Forward-looking, dynamic and value-add investment
- Stronger alignment between incentives and risk outcomes
- Greater visibility of how risks interact across the organisation
- Deeper embedding of culture and behavioural capability into daily practice
- Character leadership and tone – from the top and within – as a multiplier for sound risk culture
The Spotlight Review is intended to complement existing regulatory frameworks and firm-specific arrangements, offering a practical lens for understanding NFR in today’s operating context and supporting industry dialogue and peer learning, rather than setting new standards or requirements.
Three case studies, based on real-life scenarios, illustrate both how weaknesses in NFR management can lead to financial loss, regulatory intervention and erosion of client and market trust, and how more integrated, forward-looking approaches can support stronger outcomes. The Spotlight Review also sets out a three-stage development pathway to support reflection, discussion and peer benchmarking among senior management, heads of business and risk leaders.
About FMSB:
- Financial Markets Standards Board (FMSB) is an industry-led, member-funded global standards body for the wholesale financial markets.
- Created out of the Fair and Effective Markets Review (FEMR) in 2015, FMSB brings together its Members from banks, asset managers and owners, infrastructure and information providers, corporates, and non-bank liquidity providers, to develop Standards, Statements of Good Practice and Spotlight Reviews that raise standards of behaviour, competence and awareness – to promote the fairness and effectiveness of global wholesale financial markets.
- As well as standard setting, subject matter experts from member firms debate issues in working groups and are able to benchmark their approaches against industry peers, thus helping to lift standards of conduct.
- Access FMSB’s 2026 workplan
- See FMSB’s full membership