24 April 2014

Credit crisis spurs real-time risk management IT spending - survey

14 July 2009  |  7903 views  |  0 Risk on chalkboard

Over half of financial institutions think they would have been better prepared for the credit crisis had they been able to monitor their exposures and concentration levels in real-time, and many are now belatedly investing in technology to help them do this, according to a survey from Aleri.

The poll of over 250 asset managers, hedge funds, banks and brokerages reveals that 70% of respondents think their firm has a need to manage risk in real-time. Yet just 26.4% of hedge funds and 50% of banks feel they have the appropriate technology to do this.

In addition, the crisis has contributed to 20% of banks and 26.7% of hedge funds cutting back on information technology spending.

However, 55% of respondents say their firms took initiatives immediately following the financial crisis and are now poised to invest in real-time risk management technology.

Don DeLoach, CEO, Aleri, says: "The results are a strong indication of the industry's views on the importance of investing in technology that can deliver critical intelligence as it unfolds. The market today is moving so quickly; real-time technology is the only way to adequately manage risk in the face of unexpected market events."

A recent survey by the Economist Intelligence Unit found that just a third of financial services executives think risk management principles in their business remain sound, with over half conducting or planning a major overhaul of operations.

Meanwhile, a study from Ernst & Young published in December found that, of 48 senior executives from 36 major banks around the world questioned, just 14% have a consolidated view of risk across their organisation.

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