bob's guide to... risk management systems: Our annual industry survey results

By David Beach | 26 September 2017

In August and September we ran the bobsguide Risk Management Systems Survey to get a better idea of what you, the industry risk professionals, need and want in a risk management system. We had just under 200 responses to our survey, representing a variety of financial institutions around the world.

Overview

Who replied?

Funnily enough, 25% worked within risk management capacities for financial services, whilst another 25% were risk management solutions vendors. The 17.5% who selected ‘Other’ ranged from executive, to IT and treasury professionals.

In which country is your company based?

32% were based in the UK, and 14% in the US. Other European countries featured strongly with Germany at 11% and France at 4% along with a scattering of other European countries. Asia was also represented with 9% based in India and 5% in Hong Kong with representatives from Australia, Singapore and Tonga.

Company revenue

Does your organisation currently use a technology that specifically offers a risk management function?

51.9% of responders said that they currently used technology that specifically offers a risk management function, whilst the next significant minority of 16.9%, who do not currently have a risk function technology, said they were interested in exploring options in the market. 9.1% said that they didn’t currently have one, but that it was a priority to acquire one. A small 3.9% said they had no interest in acquiring technology specifically designed with a risk management function.

How would you rate your satisfaction with the current capabilities of your risk management technology?

The majority of you (42%) were very satisfied with your risk management systems, whilst a quarter (25%) were extremely satisfied. A third (33%) were less impressed, with 20% of total respondents somewhat satisfied, and 13% not satisfied with the current capabilities of their risk management technology.

What is the single key factor behind this selection?

We left respondents to input their own answers here as to why they rated their satisfaction with their risk management technology the way they did. User-friendliness, and multi-function, wide coverage risk management systems were the factors most likely contributed to an extremely satisfactory experience (25%). Very satisfactory (42%) risk management systems provided a quality and bespoke system that was able to integrate and adapt to many business platforms whilst real-time feedback was a highly desirable trait.

As a mid-point between negative and positive reviews, a somewhat satisfactory (20%) risk management system did not exceed expectations and “addressed most requirements”.

Those who were not very satisfied (13%) with their current risk management technology indicated it was “unwieldy, unreliable and unsupported”, whilst it also lacked At-Trade risk management.

Are you looking to adopt new risk management technology or augment the system you currently have?

11.8% of respondents were looking to purchase their first piece of risk management technology and subsequently all indicated that it was a priority to buy or they were exploring current market options in question 1. The majority of respondents (39.5%) were looking to augment and add to existing risk management capabilities which, when coordinated with the previous question, suggests they are seeking to plug holes or have a more proactive and sophisticated risk picture specific to their sector.

26.3% indicated they were happy with their current risk management technology and 11.8% indicated they did not require any risk management technology currently on the market. 10.5% were looking at a complete overhaul to replace their current risk management capabilities.

 What concerns would prevent you acquiring new risk management technology? (multiple answers optional)

The biggest concerns when risk management shopping was the implementation (54.1%) with existing systems and the cost (48.6%). 33.8% indicated their concern was the increased complexity to process and 21.6% concerned about user ease of use. 14.9% were reluctant to buy considering technology’s short shelf life, whilst 17.6% believed there was currently no system on the market for them, either in terms of sophistication or innovation.

Who would be the principal decision maker on whether to acquire a new risk management system?

As one might expect, the chief risk officer was the most likely principal decision maker on acquiring new risk management solutions with 36%. In 27% of cases, the decision fell to the chief executive or chief operations officer whilst in 18% of cases, it fell within the prevue of the financial director or chief financial officer. 

What are the key functionalities of your risk management solution? (select more than one if applicable)

It’s clear that risk analytics (51.4%) was at the forefront of what respondents expected from their risk management technology, whilst compliance was the second most selected key functionality with 47.3% along with market risk. At the other end of the spectrum, collateral management scored lowly with 17.6% and 25.7% for asset and liability management. Credit (37.8%) liquidity (28.4%) and Operational risk (32.4%) all remain as secondary functionalities for risk management. 5.4% (of Other) indicated that trading risk was also a priority.

What are your company’s key risk management related concerns? (select more than one if appropriate)

Cost of compliance was a key concern for 43.2% of respondents, whilst the feasibility of meeting regulatory change was also a significant concern at 37.8%. Interestingly, 32.4% were concerned with being able to identify emerging risks and the same percentage were concerned over data security. FX exposure scored 29.7% whilst the retention of risk management professionals was a slight concern with 16.2%.