Operational Risk Management in Financial Institutions

Large corporations often have the advantage over smaller businesses in their ability to hire full-time staff to conduct essential business operations like insurance and risk management. However, today’s increasingly treacherous business environment applies equal risk to all companies, no matter what size. Smaller business still have to be just as prepared for the risks associated with their respective industries.

But even though small- and medium-sized businesses may lack the resources to hire internally, they can sufficiently mitigate risk by employing an outsourcing company to take control of its risk management operations and financial management solutions instead.

Deloitte, a leading professional services firm, conducted a survey assessing the risk management strategies of 131 financial institutions worldwide. The “Global Risk Management Survey” identified several ways in which today’s business environment has dramatically changed the ways in which businesses go about their own risk management operations.

“Many institutions are revising their business models in response to the global financial crisis and the regulatory changes that have resulted, and so risk management programs may need to adjust accordingly, ” the report said.

For example, the survey said many businesses are catching on to the trend of appointing a chief risk officer. But most small- and medium-sized businesses can’t afford to hire someone to manage business risks on a full-time basis.