This EIU study examines the current state of finance processes and how these processes could be modified to address the new competitive and regulatory dynamics faced by financial institutions.
- Alignment between the risk and finance functions is now essential to banking.
- Financial institutions can boost profitability by a better alignment of risk and finance.
- Alignment between risk and finance begins with good data, but the bigger problems are different perspectives and cultures between the two functions.
- Attention to risk lowered downside risk for US banks during the 2008-09 global financial crisis.
- Financial institutions are now better prepared for another crisis like the last one, but may not be as well prepared to deal with new or emerging risks.
- Financial institutions are investing more in technology to improve their ability to integrate risk information into financial and performance management.
- A majority of finance functions are not applying risk data beyond compliance and product allocation to areas like analysis and budgeting.