Optial-sponsored Survey Highlights City Concerns about Operational Risk Capabilities

31st January 2006

A Chartered Management Institute survey of City institutions finds that most are still reliant on spreadsheets to manage compliance and none give top rating to existing systems

London, England, 31st January 2006 - The Chartered Management Institute (CMI) recently conducted a major survey of 109 City compliance managers to determine the most pressing areas of action and identify the most urgent unresolved issues. The survey was sponsored by Optial, the leading operational risk software provider. It was designed to drive forward Chartered Management Institute’s Operational Risk Forum, which supports General Managers in understanding the wider implications of the regulatory and operational risk management environment on their own businesses – both in specific functional areas and enterprise-wide.

Anthony Epstein, Chairman of the Chartered Management Institute Operational Risk Forum, commented “We were concerned to find such a strong reliance on spreadsheets for compliance monitoring (71%) and reporting (67%), given the well-documented history of errors that have been caused by using spreadsheets for consolidation, and their inherent lack of security and auditability. This may be a key factor contributing to the respondents’ lack of confidence in their systems; none rated their current systems effectiveness as ‘High’ while only 42% expressed confidence in their system’s ability to meet future changes”. He added, “This should act as a wake-up call to the City, given the FSA’s approach of prosecuting firms which cannot demonstrate adequate controls”.

Chris O’Brien, CEO of Optial, said, “The Chartered Management Institute OpRisk Survey has highlighted that a majority of firms (57%) now believe they need an overall risk model to ensure they catch any risks that individual systems might miss, and 38% have implemented such a system. The report also shows that two-thirds of firms (67%) rank Workflow as very important to managing risk. Optial has been designed to let firms implement an overall risk model within a coherent control framework, using workflow automation to integrate all the existing process monitoring systems”.

Judith Graham, Product Director of Optial, added, “88% of respondents found the idea of an integrated system very attractive for managing risk across geographic units. Our customers believe that the implementation of operational risk management across any bank requires a cultural acceptance of the processes involved. They want the ability to adapt a central control system to each country’s specific requirements, so they can consolidate control data directly from the individuals who perform each process. Optial’s ability to deliver this has made it the operational risk platform of choice for multi-country rollouts by Skandinaviska Enskilda Banken, IBM and Standard Chartered Bank.”

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development