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Credit risk's greatest concern for risk managers for financial services



With the decline of economies and unemployment, credit risk has moved to the top of the risk management agenda, according to the Deloitte & Touche LLP's two-year survey on the state of global risk management risk.

Credit risk is the main concern for executives at financial institutions, according to a survey by Deloitte, where 20% call it their number 1 risk, a "sharp" increase from just 3% in 2018.

Credit risk management is a practice to mitigate losses by understanding which potential customers may have an excessive risk and over an institution's predetermined risk tolerance at any given time, according to a statement issued with the report.

The survey gathered views from CROs or equivalent at 57 financial institutions around the world, representing a total of $ 27.2 trillion in total assets.

All institutions in the survey have a Chief Executive Officer 2020, an increase from 95% 21

08 and 86% 2010, data showed.

Cyber ​​security was the second highest risk, with 30% of respondents saying that cyber security was one of the three risks that would increase the most importance for their institutions over the next two years.

However, only 61% of respondents considered their institutions to be extremely or highly effective in managing cybersecurity risk, and 87% said that improving their ability to manage cybersecurity risk will be an extremely or very high priority over the next two years.

About 91% of respondents said they have an individual who is specifically responsible for cyber risk, 89% said they have an individual for information security and 87% said they are an individual responsible for compliance. Only 78% said they have a single person in charge of credit.

Eighty-four percent of institutions reported having an enterprise-wide risk management program in place, much like the share in the previous edition of the Global Risk Management Survey, with a further 11% saying they are currently implementing one. In 2010, only 52% had an ERM program in place.

Among institutions providing insurance services, only 48% of respondents rated their institutions as extremely or very effective in managing geopolitical risk, "an area that will require more focus given the growing uncertainty in the global political environment", it is stated in the report. Catalog

"Financial Institutions See More Risk from More Sources than Ever Before", J.H. Caldwell, a partner with Deloitte Risk & Financial Advisory, Deloitte & Touche LLP, and lead author of the study, said in the statement.

The 12th edition of Deloitte's two-year survey was conducted from March to September 2020, the statement said.

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