Risk Management Pushing Finance Sector to Pull Up Sleeves

Lucas Gilmore, “Big 4″ observer
March 02, 2011 /

Deloitte’s latest risk management survey across the finance sector reports a growing number of organizations working hard on incorporating risk management to their objectives and compensation structure.

The survey finds a little more than one third of respondents saying risk management has been significantly imbued in corporate planning and decision-making. However, the organizations’ incentive programs have been shown to take a longer way before risk management can be integrated into them.

Marcus Evans event organizer, which will hold a series of risk management forums this year, noted that “enterprise risk management is pulling ahead in 2010 because of the economy and the fact that organizations need to have a transparent view of risk and performance across the organization.”

The even organizer said the global crisis in 2008 has made markets more challenging to risk management experts.

“Basic processes such as risk mapping, developing the risk profile, looking for the uncertain or for the risks that you probably felt would never appear are growing in importance. Risk-mitigation techniques can help you to evaluate what the consequences of the risk scenarios might be and steer your strategy forward and positively impact the organization’s operations,” it added.

On the other hand, more than two thirds of the surveyed organizations said they are better equipped to manage risk. The rest considered their risk management strategies as ineffective.

Further, the survey showed that eight in every ten organizations are bearing the brunt of changes in regulations in certain countries, including the requirement to keep higher levels of capital and liquidity ratios.

Of the organizations surveyed, 83 percent said they have chief risk officer in place who routinely reports to top levels in the management.

Deloitte said that while Exchange Rate Mechanism increases in value, the importance of information and technology in organizations has also escalated in terms of boosting risk management techniques following the 2008 crisis.

 

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