Deloitte Touche Tohmatsu Limited has released its eighth biennial survey on risk management practices, and the study shows that financial institutions are putting more emphasis than ever on risk management and compliance.
The survey polled chief risk officers from 86 financial institutions. 65 percent of respondents stated that they have increased spending on risk management and compliance, which is an increase from 55 percent in 2010.
As for the future, 58 percent of respondents expect to increase their risk management budgets in the next three years. 17 percent expect to increase annual spending by 25 percent or more.
94 percent of company boards reported that they spend more time on risk management oversight than they did five years ago, and 98 percent of company boards regularly review risk management reports.
“The response to the financial downturn has led to far-reaching changes in financial institutions’ risk management practices, with stricter regulatory requirements demanding more attention from management and increasing their overall risk management and compliance efforts,” Edward Hida, partner, Deloitte & Touche LLP, and editor of the survey, told The Wall Street Journal. “That said, risk management shouldn’t be viewed as either a regulatory burden or a report destined to gather dust on a shelf. Instead, it should be embedded in an institution’s framework, philosophy and culture for managing risk exposures across the financial institution.”
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