Financial Institutions Step up Focus on Risk Management
Heightened regulatory scrutiny and greater concerns over risk governance are forcing financial institutions (FIs) to elevate their focus on risk management, according to eighth biennial global risk management survey issued by Deloitte Touche Tohmatsu.
The firm reports that FIs are increasing their risk management budgets, with 65% reporting an increase in spending on risk management and compliance, against 55% in 2010. Further key findings from the Deloitte report, entitled ‘Setting a Higher Bar’ and which surveyed 86 global FIs, include:
“The financial crisis has led to far-reaching changes in FIs’ risk management practices, with stricter regulatory requirements demanding more attention from management and increasing their overall risk management and compliance efforts,” said Edward Hida, the firm’s global lead, risk and capital management services.
“That said, risk management shouldn’t be viewed as either a regulatory burden or a report destined to gather dust on a shelf. Instead, it should be embedded in an institution’s framework, philosophy and culture for managing risk exposures across the FI.
“Knowing that a number of regulatory requirements remain in the queue, FIs have to be able to plan for future hurdles while enhancing their risk governance, analytical capabilities, and data quality efforts today. Those that do will be well placed to steer a steady course though the ever-shifting risk management landscape.”