Financial services firms around the world have made significant progress in developing risk appetite frameworks with many embarking on multi-year IT infrastructure projects but significant work lies ahead, according to a report from regulators.
The Senior Supervisors Group - a group of 12 bodies from 10 countries - report comes on the back of efforts from two working groups assessing the progress financial firms have made in developing risk appetite frameworks and building robust IT infrastructures.
It concludes that significant progress has been made since an earlier report looking into risk management lessons from the 2008 global banking crisis but warns that "considerably more work" is needed.
In particular, the SSG say it has observed that aggregation of risk data remains a challenge for institutions, despite its criticality to strategic planning, decision making, and risk management.
This needs to be addressed because the effectiveness of risk management practices will be tested as financial institutions adjust their business strategies to meet challenges in the marketplace and an evolving regulatory environment.
Read the report here:
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