One in three senior executives in the financial services sector believe the industry is ill-prepared to measure and deal with operational risk exposures, according to research conducted by the Institute of Financial Services and commissioned by IBM.
Interviews with 115 senior executives in both retail and institutional finance companies reveals that only 51% of the organisations represented can definitely measure their operational risk exposure. A mere 46% have near real time operational risk detection systems in place and of the operational risk and compliance executives spoken to, only 69% claim to have access to reliable data.
Furthermore, 32% of those interviewed are unaware of the capital allocation requirements of the Basle II Accord, which aims to reduce risk by tying banks' capital more closely to the risks they hold.
The main risks concerning financial services companies are IT-related, followed by legal and compliance, execution, external and internal fraud.
Over half of all executives interviewed would be willing to join an industry wide data sharing consortia to improve their understanding of operational risk and resilience.