Banks to spend US$1b on risk
(10 February 2010 – Global) Research from Deloitte, a business advisory firm, has indicated that the top 100 financial institutions will invest over US$100 billion (A$115 billion) a year implementing risk governance frameworks by 2012, more than double the amount spent on risk and control activities pre GFC.
The firm surveyed the chief risk officers, or equivalents, at 28 financial institutions including investment and retail banks, and insurers.
The majority of the surveyed respondents said that they expect spending on risk and compliance to continue to rise as direct result of the global financial crisis.
They also said that they believe the money will be spent on people, computer systems and meeting Basel II and Solvency II capital standards.
Of those surveyed 93 percent said that their firms have comprehensive enterprise-wide risk statements in place, however only 67 percent said that these are having an impact on risk taking behaviour.
Martyn Jones, chairman, corporate governance services group, Deloitte said that it is clear that financial institutions are investing more heavily in risk management, but some are struggling with the integration.
The fundamental issue is around behavioural changes, without changes in attitudes and behaviour no framework will be truly effective, Mr Jones added.
The majority of the surveyed respondents said that they expect spending on risk and compliance to continue to rise as direct result of the global financial crisis.
They also said that they believe the money will be spent on people, computer systems and meeting Basel II and Solvency II capital standards.
Of those surveyed 93 percent said that their firms have comprehensive enterprise-wide risk statements in place, however only 67 percent said that these are having an impact on risk taking behaviour.
Martyn Jones, chairman, corporate governance services group, Deloitte said that it is clear that financial institutions are investing more heavily in risk management, but some are struggling with the integration.
The fundamental issue is around behavioural changes, without changes in attitudes and behaviour no framework will be truly effective, Mr Jones added.
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