Bankers in Europe are not confident in their risk management practices, according to a recent study by Oracle.
The study of 450 financial services and IT professionals at European banks found that almost half of respondents reported that they lacked confidence in the accuracy of counterparty and risk data that they used for risk analysis-a disturbing figure given the ongoing financial concerns in the region.
Even more disturbing was the finding that almost 15 percent of respondents’ banks could not even monitor changing risk scenarios.
More than two years after the financial crisis began, and with headline-grabbing bank failures around the world still happening on a weekly basis, some banks in Europe have seen little change to their risk management practices and systems.
In addition, 85 percent of respondents have not integrated performance management and risk analysis systems-which could help increase the speed of response to risk scenarios that do arise.
The goal of the survey was to determine how banks’ risk management practices had changed as a result of the crisis. But the data appears to show that not enough changes have been made, and the bankers themselves know it.
Part of the problem is how bank systems are structured, with operations in silos and patchwork systems piled on top of legacy solutions. And with the need to focus IT resources on simply meeting upcoming compliance needs, it may be some time before internal data quality and integration improves to the point that banks can get a full picture of their risk and are able to respond to it in a timely manner.
So much for best-practice risk management.