Institutions still fall short on risk management

Only 47% considered their institution very effective in managing business continuity/IT security risk. Operational and vendor risk yielded 43% each, and geopolitical risk 35%. This compares with 70-80% for their ratings of market, credit and liquidity risk.

Only 35% of executives reported that their institutions had already implemented an ERM programme, while almost a third (32%) are in the process of establishing one. Where ERM programmes have been created, executives have reported they yielded benefits.

Of companies with ERM initiatives, 75% of executives said the total value of their programmes had exceeded the costs. However, this assessment of value is largely qualitative, as only 4% of executives said their institutions quantify the benefits of their ERM programmes.

“While progress in the area of risk management has been real, a great deal more needs to be done,” said David Myers, investment banking partner at Deloitte in London.

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