Deloitte Global Risk Management Survey:Risk management in the spotlight |
Singapore – 25 June, 2009 — The systemic risk to the global financial system posed by recent developments have substantially raised the demands placed on both regulators and risk managers, according to a recent survey by Deloitte, a professional services firm. The survey which includes responses from 111 financial institutions worldwide with more than US$19 trillion in total assets, represents Deloitte’s most recent look at the state of risk management in the global financial services industry.
Edward Hida, global leader, Risk & Capital Management, Deloitte, comments, “The current turbulent conditions, including business volatility, a lack of liquidity in many financial markets, and a worldwide economic downturn – are bringing the importance of risk management front and centre, as never before.”
Risk management is facing a turbulent environment and this report provides an assessment of how financial services companies around the world are responding to these realities and the key risk management challenges they face.
Many financial institutions have made significant progress in a number of key governance areas related to risk management such as establishing a Chief Risk Officer, having board responsibility for risk oversight and an approved risk framework. However, there continue to be opportunities for financial institutions to strengthen risk management in order to meet the challenges that lie ahead.
To gain a comprehensive view of all the risks they face, their linkages and how they are being managed, more institutions should revisit their risk management programmes to see if they are indeed enterprise-wide in coverage and address the inter-relationship of risks. The programmes should also be sufficiently robust to respond to unanticipated events and be subjected to stress-testing on a regular basis.
“In addition to the management of more traditional risk types, like market, credit and operational risk, organisations need to improve abilities to manage other risk types, such as liquidity and reputational risk,” remarks Uantchern Loh, regional leader for Deloitte’s Enterprise Risk Services practice in Asia-Pacific.
“Risk management programmes may also require more sophisticated methodologies that reflect the increasing complexity of financial products and interdependence of financial markets.”
Beyond specific metrics and tools, however, successful risk management rests on creating a risk-aware culture. Senior management may need to provide additional communications that reinforce that managing risk is part of every employee’s responsibility, and take steps to incorporate risk management goals into performance goals across the organisation.
Though recent developments in the financial markets have tested the capabilities of risk management across the financial services industry, the survey results show that the continued strengthening of the risk management function allows institutions an opportunity to emerge more resilient and better able to meet the competitive challenges ahead.
About Deloitte
Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in 140 countries, Deloitte brings world-class capabilities and deep local expertise to help clients succeed wherever they operate. Deloitte's 165,000 professionals are committed to becoming the standard of excellence.
Deloitte's professionals are unified by a collaborative culture that fosters integrity, outstanding value to markets and clients, commitment to each other, and strength from cultural diversity. They enjoy an environment of continuous learning, challenging experiences, and enriching career opportunities. Deloitte's professionals are dedicated to strengthening corporate responsibility, building public trust, and making a positive impact in their communities.
Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/sg/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its member firms.
© 2009 Deloitte & Touche LLP. Member of Deloitte Touche Tohmatsu
Last Updated:
Attachments
(2680.13 KB)
Contacts
- Name:
- Doreena Tong
- Company:
- Deloitte Singapore
- Job Title:
- Corporate Communications
- Phone:
- dotong@deloitte.com