Though the financial crisis had few winners (besides hedge funds that bet big against the subprime market), one could argue that bank risk executives gained some respect during those difficult years, at least those who kept their jobs.
At 64 percent of banks that participated in an Accenture survey, the role of risk overseer has been elevated to a c-level position. This compares to 45 percent across all other industries surveyed. Another 20 percent of banks say they have an executive fulfilling the responsibilities of a chief risk officer, without the title.
Banks' investment in risk management technology is high. About a third of bank executives surveyed have spent more than $100 million in developing risk capability, according to report co-author Fred Kim, who is senior executive of Accenture's risk management practice in North America. And 22% have spent more than $250 million. "That's quite a bit," Kim notes. "They're expecting to invest in the next couple of years as well. A lot of banks have thought of risk management more from a compliance perspective. Now they're looking at it as a competitive advantage going forward, to help improve their future growth and profitability."
Banks are more likely to have invested in and built an enterprise risk management system to analyze risks across multiple departments and disciplines: 79 percent of the surveyed banks have done so, versus 67 percent across all 400 companies questioned.
However, the bankers do confess an need to better integrate risk systems. While 34 percent of respondents say their risk management and capital adequacy/liquidity management functions are integrated to a large degree, only 11 percent say they're fully integrated.
Risk officers are more alarmed about fraud than ever: 93 percent of respondents say financial crime and fraud are more challenging to address than two years ago.
One data point from the survey that surprised Kim was that only 62% of bank executives surveyed are concerned about regulation. "I would have expected that to be much higher, especially when you think about Dodd-Frank, Basel III, the Durbin Amendment and new mortgage rules," he says.
