Deloitte: One-third of financial institutions concerned over risk management abilities

Global Risk Management Survey Deloitte

Risk management systems are essential tools that financial organizations of all sizes must implement into their daily workflow. A failure to do so could have negative effects on the company or its clients.

With recent research showing that not all banks are confident in their current risk management systems, updating software and properly training employees are approaches that should be considered by businesses.

According to Deloitte’s recent Global Risk Management Survey, about one-third of financial institutions said their systems were “extremely effective” or “very effective” in data management/maintenance, data process architecture/workflow logic or data governance. Additionally, the study showed that less than 25 percent of respondents said their company’s systems were “extremely effective” or “very effective” in the same areas.

Edward Hida II, CFA, a partner at Deloitte & Touche LLP, said in a company statement that for some of the newer governmental rules and regulations, specific rules for financial organizations to follow are still being developed.

“It remains to be seen what effect new rules may have on strategy and business models, and what steps will be required to maintain regulatory compliance,” Hida said. “CIOs at financial institutions may need to provide additional analytical capabilities, enhanced information and technology systems, and increased access to underlying data for their companies to respond flexibly to ongoing changes.”

The report also showed 63 percent of respondents listed finding improvements to risk data quality and management as a top priority, which was an increase from the 2010 survey, in which just 48 percent claimed that as a main issue.

Risk management software development must be able to keep pace with evolving technology. Financial institutions that want to keep pace in a changing industry must also ensure that their risk management efforts are making the necessary changes as well.

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