Risk management salaries rebound as data and IT concerns persist

Risk management salaries rebound as data and IT concerns persist

Business and IT staff at Europe's financial institutions want more emphasis placed on risk management, with just a quarter confident that their existing IT systems are capable of using stored data to provide a full analysis across all business units, according to research commissioned by Oracle.

The survey of 228 business professionals and 222 IT staff in financial institutions across Europe, conducted by Vanson Bourne, indicates that existing IT systems are unable to deliver what businesses need to react immediately to external evenst.

Almost two-thirds of respondents do not have confidence that IT is able to provide a 360-degree view of the entire business. For example only 32% of the participating banks claimed they had access to vital data like counterparty information and 25% of the participating UK banks couldn't even produce this.

Over 40% of financial institutions surveyed do not currently assess risk and performance together and only 18% of respondents report an ability to deliver performance and risk information to the business in real-time.

The vast majority - 85% - of respondents from the banking sector do not have performance management systems completely integrated with risk analysis systems and almost half are not confident of the accuracy of their risk and counterparty related data.

Nazif Mohammed, VP, Emea, finances services, Oracle, says: "Financial institutions must integrate risk and finance to provide a solid foundation for the future. This research highlights that there is still a long way for financial institutions to go to confidently manage their information. Outdated or irrelevant data hinders effective decision-making and performance. Without complete visibility into the business, financial institutions will continue to be unable to react to market conditions as they occur."

The growing importance of risk management to financial institutions has been highlighted in a new salary survey by Risk Talent Associates, which found total compensation for risk professionals in the capital markets was on the rebound in 2009, returning to levels observed between 2003 and 2004 after steady declines in 2007 and 2008. Between 2008 and 2009, total compensation increased by three percent following the sobering 12% decrease between 2007 and 2008 that reflected the impact of the credit crisis and early parts of the recession. Between 2008 and 2009, salaries grew by two percent and bonuses by four percent.

The survey also reveals that the rebound in total compensation is strongest for junior and mid-level risk managers in terms of years of experience and titles. Risk professionals with more than 16 years of experience, which includes 38% of the 400 survey participants, continued to see slight declines of one percent in total compensation. The average total compensation for chief risk officers, which has topped $1 million in surveys prior to 2008, hovers around $850,000.

Michael Woodrow, Risk Talent president notes: "Firms understand that their mid-level risk managers are under siege by recruiters, as financial services firms ease their headcount restrictions. As such, mid-level risk managers are being well compensated and appreciated. No firm wants to lose these valuable mid-level professionals. Senior risk officers, on the other hand, are not as quickly returning to pre-crash compensation levels."

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