The words “risk management” usually evoke less subjective, more data-driven pursuits. But data and objectivity can only get you so far. To navigate unquantifiable hazards, your risk management team must make judgment calls – calls that are in jeopardy if all of the team’s viewpoints aren’t considered.
Walmart made headlines recently for it’s history of bribing Mexican government officials in order. Then, top executives disregarded the idea of accountability and swept the company’s misdeeds under the rug. This raises the question of who is responsible ultimately for an organization – bank’s – risk management successes or failures.
Is your firm making data-driven decisions? Or is it following the herd and overestimating or underestimating the risks associated with investments, product releases or customer needs? Read this post about the dangers of ‘availability bias.’
Viewers from the outside may not fully appreciate or understand these complexities of banking in the 21st century. But is complexity a defense for a perceived unwillingness to change? The 2012 EIU report on accountability in financial services has uncovered how C-level executives view their responsibilities – beyond maximising profits.
The recent disclosure of a multibillion-dollar trading loss at JPMorgan Chase reminds us again of the challenge and complexity of risk management and who is ultimately responsible.
The Economist Business Unit (EIU) survey reveals that the financial services industry is still struggling to balance short-term, bottom-line results with longer-term and wider societal goals.
When organizations and systems appear to be performing well, when problems develop slowly over time, and when a variety of systematic lapses occur, even the best and the brightest simply do not notice gaps in information that would indicate a looming crisis.
Everyday, companies cede hard evidence to the political agendas of a willful manager or department. Savvy managers understand that weaving data-driven decisions into the fabric of corporate governance can obviate organizational infighting and drive progress.
Al Sim, Senior Director at SAS, talks with Silvia Pavoni, Investment Editor for “The Banker,” about risk management best practices and trends that were uncovered during the 2011-2012 joint Financial Times/SAS enterprise risk management thought leadership program.
When you take a look back over 2011, what will be the the stand out memory? Will it be the struggles in Greece and the other Eurozone countries to restructure their debt? How about the new regulatory changes or the new regulatory bodies in the US? David Rogers, SAS, says that many of these old problems caused by one overriding issue – data. What will you be doing about data in 2012?
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