Navigant Consulting and Economist Intelligence Unit Survey Reveals Financial Services Firms Focused on Enhancing Risk Management Practices in Advance of New Legislation
The Risk Management Paradox, available immediately at www.navigantconsulting.com, is a summary of the first of three EIU surveys sponsored by Navigant. The survey results suggest there is significant room to improve risk intelligence – making it more current, comprehensive and consistent – an observation that is especially important as more than 70 percent of respondents cite risk disclosure as a likely element of expected regulatory reform.
“It is evident that the financial crisis has led to a 'crisis of
According to the survey, most respondents stand by their risk-monitoring capabilities, but concede they are most confident about their ability to monitor mainstream risks (e.g., credit, accounting, liquidity risk), and least confident in the areas revealed as problematic by the recent credit crisis. For example, 87 percent say they are “Excellently” or “Well Positioned” to identify and monitor credit risk, but fewer (67 percent) are equally confident of their capabilities on enterprise risk, and 47 percent describe themselves as “Weak” on new and emerging risks.
“Effective risk management hinges not only on an organization’s ability
to capture data on risk, but the ability to interpret, escalate, and
make decisions based on the information. The survey data shows that
financial professionals recognize this need but struggle with
implementing meaningful solutions to enhance risk management. We work
alongside clients to design, enhance, and implement robust risk and
compliance programs to shore up investor confidence,” said
Navigant’s Capital Markets Regulatory Advisory team is prepared to help clients address the complex risks survey respondents found most problematic. The team has advised more than 100 asset management firms in matters such as compliance program development and ongoing compliance reviews; business unit, business process and controls risk assessments; pricing and valuations; restructuring; and regulatory exam preparation and response. In addition, Navigant provides investor due diligence services under a time tested and proven evaluation and risk assessment framework. They have performed approximately 150 sub advisor reviews in six regulatory schemes over the past four years.
The survey respondents comprise nearly 200 executives from a broad range
of financial services firms around the globe. Of the executives
surveyed, 37 percent are based in
Navigant Consulting, Inc.