Faced with growing exposure to risk through mega mergers, off-shoring, outsourcing, more stringent regulations, and an increased volume of lending, 81 percent of global financial services institutions have established the position of Chief Risk Officer (CRO), according to Deloitte’s biannual Global Risk Management Survey released in December 2004. That number has increased from 65 percent since the last survey was conducted in 2002. The survey also shows that three quarters of CROs in financial services firms report to their chief executive or the board of directors. There also has been a 25 percent increase in board-level oversight of risk management over the last two years.

Despite the increasing emphasis on containing risk, the survey shows, however, that enterprise risk management (ERM) continues to be an elusive goal for many institutions. In fact, less than one-quarter of survey participants say they are able to integrate risk across any of the major dimensions of risk type, business unit, or geography. Their focus in ERM is on measuring economic risks including credit, market, operational, and liquidity. While 38 percent of respondents say they have integrated the organizational structure required to deal with these risks, only 15 to 16 percent reported progress in integrating methodology, data, and systems.

The survey was conducted online with invited participants comprising the senior risk management officers of global financial institutions. 162 of the top global financial institutions participated. Respondents broke out regionally as follows: 17 percent of respondents were from North American companies; 25 percent from South American companies; 26 percent from European companies; and 31 percent from Asia/Pacific. Respondents answered questions which addressed the range of key risk management issues facing financial institutions including: Risk Governance, Economic and Regulatory Capital, Enterprise Risk Management, Credit Risk Management, Market Risk and Asset/Liability Management, Operational Risk Management, Risk Systems and Technology and Extended Enterprise Solutions.

Read our global press release or learn more from the entire report, which is available as a PDF file attachment below: