Credit crisis puts spurs to real-time risk management IT spending

According to the results of a survey from Aleri, over half of financial institutions think they would have been better prepared for the credit crisis if they had been able to monitor their exposures and concentration levels in real-time, and many are now belatedly investing in technology to help them do this.

The poll of over 250 asset managers, hedge funds, banks and brokerages showed that 70% think their firm has a need to manage risk in real-time, while just 26.4% of hedge funds and 50% of banks feel they have the appropriate technology to do this. Besides, the crisis has contributed to 20% of banks and 26.7% of hedge funds cutting back on information technology spending.

However, 55% of respondents say their firms took initiatives immediately following the financial crisis and are now poised to invest in real-time risk management technology.

According to a recent survey by the Economist Intelligence Unit, just a third of financial services executives think risk management principles in their business remain sound, with over half conducting or planning a major overhaul of operations.

In the meanwhile, the results of a study from Ernst & Young published in December revealed that, of 48 senior executives from 36 major banks around the world questioned, just 14% have a consolidated view of risk across their organisation.