A Different Side to Risk Management

s a result of the ongoing credit crisis, senior managers in financial services firms are reassessing their risk management processes. This is leading to a greater emphasis on enterprise risk management (ERM) or firmwide risk management, according to “The Bigger Picture: Enterprise Risk Management in Financial Services Organisations,” an Economist Intelligence Unit survey and report sponsored by SAS Institute Inc.

The report is based on an Economist Intelligence Unit survey in July 2008 of 316 senior executives from around the world. Among the respondents, 59 percent say that the credit crisis has forced them to scrutinize their risk-management practices. A key challenge for many financial services companies is that the move to an enterprisewide risk‑management approach is lengthy and often involves a shift in corporate culture.

Executives also indicated that a lack of relevant, timely, and consistent data is preventing a wider acceptance of ERM.

“This survey confirms that financial services organizations will increasingly be looking to adopt best practice in risk management, with firmwide risk and stress testing being placed center stage,” says Allan Russell, head of global risk practice at SAS.

Other findings of the report include:

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