Nearly 65% of the 900+ risk managers interviewed for the survey believe their board does not understand risk properly and nearly one-third say their organisation does not adhere to the legal obligations for risk management and control.

Institutions' IT departments also come in for criticism. The majority (56%) of risk professionals believe their organisation's IT department is holding back the risk management function through lack of understanding of risk issues.

More than half - 57% - feel that risk management and control is not adequately funded in their organisation, despite 61% saying that risk management is viewed as a profit generator rather than as a cost centre within their institutions. However, three in four expect spending on risk-related activities to rise in the future and most expect budgets to rise by over ten per cent.

The research shows that risk managers strongly support moves to amalgamate the different forms of risk management. More than three quarters - 78% - of risk professionals believe that operational credit and market risk should be integrated together in order to fully understand enterprise-wide risk.

Over two-thirds of risk managers - 69 per cent - believe that risk departments are becoming more streamlined as a result of IT developments. This is enabling risk personnel to focus on more value-added activities such as data analysis and interpretation instead of data collation.

However, clean risk data is viewed by most as a key challenge in the success of risk management endeavours - something which will become increasingly difficult to achieve in the banking sector as mergers continue, says CWB. Over two-thirds - 64 per cent - believe that a lack of clean risk data is the key reason for the failure of any new risk system implementation.

Commenting on the research findings, David Pritchard, principal consultant in CWB’s risk practice, says: "There is an opportunity for many institutions to gain a competitive advantage by improving and enhancing their risk management function, but this requires better understanding of risk at board-level and in the IT department. The majority of risk managers are clearly aware of the weaknesses within their organisations but they do not have sufficient influence or time to make the required changes on their own."

There is clearly some work to do in convincing senior management of the benefits of the risk management function within many organisations, he says. Over 70 per cent of respondents do not think risk is a respected profession within the financial markets.