As Financial Services Firms respond to a mix of regulatory and economic pressures, a new report sees a resultant increase in spending on enterprise risk management (ERM) technologies. London-based Chartis Research's RiskTech100 global ranking of the top 100 risk technology vendors also delves into the practices the vendors' customers employ to counter enterprise risk.
When it came to describing their ERM regime, only 43% of respondents felt that their organizations currently have well-formulated and communicated strategies for ERM. Indeed, 9% of respondents, which included both insurers and bankers, indicated that their companies have no current strategy in place, while 29% described their ERM regimes as "loose concepts" that are not fully defined with partial sponsorship from their boards of directors.
However, the report did detect a willingness of companies to spend on ERM. When asked about their risk technology expenditures for 2010, only 3% of respondents foresaw a decrease, while 31% said it would remain flat and 31% said it would increase by 10%. An additional 25% predicted an increase of more than 25%, while 10% said their increase would be greater than 50%.
"The growth in expenditure on risk technology is fueled by increasing interest in corporate governance and risk-based regulation," says Peyman Mestchian, managing partner at Chartis. "However, many risk technology buyers have learned the expensive lessons from Sarbanes-Oxley and Basel II and are looking for smarter, more integrated approaches to implementing risk management systems and breaking down the traditional silo-based approach."
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