E&Y recently published a review of risk management. They surveyed over 500 companies around the globe, almost 80% of which have over $1 billion in revenue, and the sample represents a variety of industries. You can find the report here.

Interestingly, only 1% of those surveyed said they would be spending less on risk management in the next 12 to 24 months, which is sensible given recent events. Putting this in context of declining overall corporate revenue suggests that risk management will emerge from the recent downturn with a larger share of corporate spending.

E&Y focused in on the complexity of risk management at most organizations:

"Over the past few decades, the number of risk management functions has grown to the point where most large companies have seven or more separate risk functions — not counting their independent financial auditor. This has created inefficiencies and resulted in a degree of fatigue on the business. As the number of risk functions increases, coordination becomes more diffcult and often results in coverage gaps and overlapping responsibilities. The demands and various reporting requirements placed on the business by these risk functions can become significant and burdensome. The number of risk functions and the various communications from these functions can be a challenge for executives and the board of directors to manage and understand."

Over 90% of those surveyed indicated that there is overlapping coverage in two or more risk functions. It seems likely that a substantial portion of the overlapping coverage is the result of inefficient processes and technology infrastructure. The argument for improving efficiency addresses not just the time and effort that managing multiple risk management functions creates but also the high infrastructure cost of supporting multiple platforms, software applications and processes. Interestingly, 61% said that they planned to commit no additional human resources, which means that incremental spending will have to come from savings, much of which by our measure can be achieved through the use of a unified, easy to manage platform for managing risk and compliance. Please contact us if you're interesting in exploring those savings at your organization, or join our webinar.

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