Risk management and financial institutions
As technology continues to evolve, more financial institutions are working to integrate new systems, products and services as quickly as possible. It is important for these companies to remember that as they become more reliant on computers, they must also ensure that they have strong risk management tools in place.
Recent research shows that such implementations are becoming more common, which is good news for all involved in the financial industry.
According to a recent survey from Deloitte Touche Tohmatsu Limited (DTTL), 65 percent of financial institutions reported an increase in spending on risk management and compliance, which was an increase from 55 percent in 2010.
Furthermore, 94 percent of company boards now devote more time to risk management oversight than five years ago and 98 percent of company boards or board-level risk committees regularly review risk management reports. In 2010, the latter number was just 85 percent.
Edward Hida, DTTL Global Lead of Risk & Capital Management Services explained in a company press release that the financial crisis has pushed banks to alter their risk management practices. The crucial thing to remember though, is that comprehensive risk management needs to be embedded in daily operations. If it’s viewed as a burden, then it will never change anything.
“Knowing that a number of regulatory requirements remain in the queue, financial institutions have to be able to plan for future hurdles while enhancing their risk governance, analytical capabilities, and data quality efforts today,” Hida said. “Those that do will be well placed to steer a steady course through the ever-shifting risk management landscape.”
With the right risk management framework, financial institutions will have the necessary tools to keep themselves profitable and sensitive customer data safe. No organization can afford to fall behind on offering clients the most secure options possible, which is why it is important to keep pace in an evolving industry.