The fallout from the financial crisis and the global effort to stabilise the worldâs economies, including corporate bailouts, have prompted discussion of increased regulation that will require a greater focus on risk management in day-to-day business operations.
A recent report issued by the United States Government Accountability Office revealed that U.S. regulators failed to take action upon learning of critical weaknesses in the risk management oversight at some of the countries largest financial services institutions. The report provides further evidence of the need for a regulatory overhaul in the financial services industry. Testifying before the House Financial Services Committee on March 26, 2009, Treasury Secretary Timothy Geithner hinted at the direction of the new regulation when he said, âWe need much stronger standards for openness, transparency, and plain, common sense language throughout the financial system.â Gordon Burnes, vice president of marketing, OpenPages, wrote back in a September 2008 blog post that, âWeâre going to witness a shift in the industry as companies that can provide transparency into risk exposure will be valued more highly than those that cannot. Furthermore, regulators will demand this kind of transparency.â
In the New Era of Risk Management, companies will take a risk-based approach to managing the business. This approach allows companies to identify and manage the key risks across their business. It also enables companies to focus on whatâs important and to avoid unexpected outcomes while improving performance. Also in the New Era of Risk Management, companies will seek to integrate risk management silos from across the business. This integration will reduce costs through a consolidated technology infrastructure and shared processes and will provide better transparency into the interdependencies of risks in the business.
OpenPages is working closely with its customers as they make the transition to a risk-based approach to managing their business, and many of its customers are integrating heretofore disparate risk management activities into a common set of processes supported by a single technology platform, OpenPages 5.5. These companies are prepared for the New Era of Risk Management.