Survey: Crisis prompts "drastic" reform of risk management

8 May 2009

The economic crisis has shaken financial services institutions' confidence in risk management and more than half have either conducted or plan to conduct a thorough overhaul of their own risk controls, a new survey has found.

According to the global poll by the Economist Intelligence Unit (EIU) on behalf of business analytics specialist SAS, only one-third of financial services executives think the principles of risk management remain sound in the light of the current crisis.

The survey indicates that reform will be "far-reaching and comprehensive", with key issues including the improvement of data quality and availability, the strengthening of risk governance, adopting a firm-wide approach to risk and achieving deeper integration of risk within lines of business.

However, with only 40 per cent of those polled saying the importance of risk management is appreciated throughout their organization, the survey said more needs to be done to ensure a culture of risk management is embedded in the financial services industry.

Allan Russell of SAS said: "The key will be investment in a risk infrastructure that supports a holistic view of risk within organizations, embedded within day-to-day operations and overall business strategy."

Established in 1946, the EIU provides analysis of over 200 national markets and six major industries.

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