Leading financial institutions are moving towards a more holistic approach to risk management but continue to struggle with inadequate data gathering and measurement tools, according to a survey by PricewaterhouseCoopers.
The survey is a follow up to an e-briefing first published in July based on interviews with senior bankers and a survey of enterprise risk management among 14 of the world's largest firms.
The follow-up survey finds that 75% of respondents now articulate risk appetite at the group level and half of survey participants have made a senior appointment to oversee enterprise-wide risk. More than 50% have revamped policies for the authorisation of risk-taking to ensure closer alignment with the organisation's strategic objectives.
However, just under half the respondents remain dissatisfied with the measurement tools at their disposal and 85% see aggregation of data across business lines as an area for improvement. Virtually all respondents (93%) stated that integrating legacy systems and databases remains a pressing challenge.
Hans-Kristian Bryn, global risk management partner, PricewaterhouseCoopers, says the forthcoming implementation of the Basel Accord will force banks to tighten lax procedures. He forecasts that over the next two to four years banks will be forced to devote increased resources to redesigning and rebuilding institutions’ systems and data management infrastructure.
He says banks should look to enabling technologies such as XBRL to speed up the collection, aggregation and dissemination of risk and value related management information.