Financial institutions have scope for improvement in risk management, says PwC

Leading financial institutions are moving towards a more holistic and integrated approach to risk management, but need to continue to improve their risk management processes, according to a new survey from financial services firm PricewaterhouseCoopers (PwC).

PwC said half the survey participants have made a senior appointment to oversee enterprise-wide risk, and 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.

As a result of its findings, PwC recommends that financial institutions must assess the balance between risk and return, showing greater appreciation for the risks to their franchise and shareholder value. Senior management must then convert this assessment into a corrective action plan and focus on accurate forecasts, stress testing and reporting, PwC added.

Hans-Kristian Bryn, global risk management partner at PwC in London, said the survey illustrates that drawing a complete picture of risk appetite and exposure is clearly a daunting task, even for pioneering institutions. “With the forthcoming implementation of the Basel II Accord, which will require banks to put aside capital to cover operational risk, institutions need to tighten their risk management systems,” Bryn said.

The survey of enterprise risk management was conducted among chief risk officers at 14 of the world’s leading financial institutions, and is a follow-up to a study launched by PwC in July 2002, entitled ‘Taming Uncertainty: Risk Management for the Entire Enterprise’. The study stressed that many financial institutions are not managing the full spectrum of risks effectively.

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Stemming the tide of rising FX settlement risk

As the trading of emerging markets currencies gathers pace and broader uncertainty sweeps across financial markets, CLS is exploring alternative services designed to mitigate settlement risk for the FX market

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here