New Research from the Economist Intelligence Unit Finds Financial Institutions' Improved Risk Management, Yet Much Work Remains

New Research from the Economist Intelligence Unit Finds Financial 
Institutions' Improved Risk Management, Yet Much Work Remains to be Done 
Multiple challenges are faced, including lack of resources, regulatory 
uncertainty and need for better risk information, according to survey 
sponsored by Protiviti 
MENLO PARK, Calif., July 25, 2013 /CNW/ - Five years after the 2008 financial 
crisis, financial institutions around the world indicate that while progress 
has been made in improving risk management capabilities, many are still 
struggling with foundational elements, according to a new international report 
sponsored by global consulting firm Protiviti (www.protiviti.com). Titled 
Restoring Confidence: Risk management capabilities in the wake of the 
financial crisis (www.protiviti.com/EIUriskresearch) and conducted by the 
Economist Intelligence Unit (EIU), the report surveyed 350 senior-level 
executives at financial institutions across the globe about the state of risk 
management following the financial crisis. 
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The results of the EIU survey show that only 20 percent of financial 
institutions feel they have integrated risk awareness into their corporate 
cultures, with just 15 percent making substantial improvements toward 
implementing or enhancing comprehensive, enterprise-wide risk management 
systems. 
"Respondents painted an equal glass half full and half empty picture. Many 
institutions have made progress towards improving risk management 
capabilities, and recognize the linkage between strong risk management and 
positive customer impacts," said Cory Gunderson, managing director of 
Protiviti's global risk and compliance practice. "However, much effort remains 
to be done on such fundamental elements as integrating risk awareness into 
corporate cultures, improving risk aggregation, and the quality of underlying 
data, all of which need to occur in a time of belt-tightening and intense 
competition for resources." 
A Focus on Regulatory Change 
Despite the need for more integrated risk awareness throughout their 
organizations, financial institutions are keenly aware of risks surrounding 
the evolving regulatory environment. In fact, nearly half (49 percent) 
consider dealing with increasingly complex regulatory pressures as their top 
risk management priority. Interestingly, a significant number of respondents 
say growing scrutiny from several different regulators is more burdensome than 
the actual regulations and associated costs for implementation. 
"There is no question that the increased scrutiny by the regulators can be 
challenging, but risk officers are also starting to understand that some of 
this regulatory pressure, if it is well thought out, can be quite beneficial 
to their organizations," said Tim Long, a Protiviti managing director and the 
firm's global regulatory risk management practice leader. "In fact, nearly 60 
percent of respondents admitted that tighter regulatory controls provide 
stronger assurances to customers, which in turn creates a distinct competitive 
advantage." 
Ongoing Challenges and Obstacles 
When asked what the obstacles are to dealing with key risks, 42 percent of the 
respondents said not having enough people and time; 24 percent indicated a 
lack of appropriate skills, and roughly 25 percent pointed to inadequate 
funding. 
"As enforcement expands and intensifies without a commensurate increase in 
resources, the devil is in the details," said Carolyn Whelan, editor at the 
Economist Intelligence Unit. "Progress has been made, but the research 
suggests much more can be done to foster a strong risk management culture 
across the entire enterprise." 
Regional Disparities 
According to the survey, perception of risk varies considerably by global 
region, with North American businesses attributing less importance to nearly 
every category of risk compared to their peer organizations. 
For example, when asked to rank the importance of global economic instability, 
only one-third (33 percent) of North American respondents listed it as a 
top-three risk compared to nearly half in both Europe (48 percent) and the 
Asia-Pacific region (47 percent). Additionally, North American institutions 
are about half as likely (20 percent) as their European (37 percent) and Asian 
(45 percent) counterparts to consider reputational risk a top priority. 
About the Survey 
The Protiviti-sponsored survey Restoring Confidence: Risk management 
capabilities in the wake of the financial crisis was conducted by the 
Economist Intelligence Unit in March 2013. To assess the progress of, 
opportunities for, and shortcomings of financial institutions in meeting new 
requirements, and to determine areas demanding more focus, the EIU surveyed 
350 senior-level executives at financial institutions across the Unites 
States, Europe, the Asia-Pacific, the Middle East, and Africa. 
Respondents surveyed included C-level executives and board members (46 
percent) and senior vice presidents, vice presidents and directors (21 
percent). Of these, about half (53 percent) work in banking, 23 percent in 
insurance, and the rest in capital markets and private investment funds. 
Most respondents were located in Western Europe (47 percent) and North America 
(38 percent), with the bulk of the remainder in the Asia-Pacific and Eastern 
European regions. Roughly two-thirds work for companies with annual global 
revenue of $500 million to $5 billion, and one-third work for companies with 
more than $5 billion in annual global revenue. 
About Protiviti Inc. 
Protiviti (www.protiviti.com) is a global consulting firm that helps companies 
solve problems in finance, technology, operations, governance, risk and 
internal audit. Through its network of more than 70 offices in over 20 
countries, Protiviti has served more than 35 percent of FORTUNE 1000(®) and 
FORTUNE Global 500(®) companies. The firm also works with smaller, growing 
companies, including those looking to go public, as well as with government 
agencies. 
Protiviti is a wholly owned subsidiary of Robert Half International (NYSE: 
RHI). Founded in 1948, Robert Half International is a member of the S&P 500 
index. 
Protiviti is not licensed or registered as a public accounting firm and does 
not issue opinions on financial statements or offer attestation services. 
Editor's note: An infographic of key survey findings is available in JPEG and 
PDF upon request.
 

SOURCE  Protiviti 
Kathy Keller, +1-650-234-6252, kathy.keller@protiviti.com 
http://www.protiviti.com 
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CO: Protiviti
ST: California
NI: FIN CPR ELE INS INTERNET ECOSURV LAW VERDICTS LAWVIEWS ACC  
-0- Jul/25/2013 12:03 GMT
 
 
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