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2012 US asset management risk survey: risk reporting – EY – Asset Management - EY - United States

US asset management risk survey 2012

Monitoring and measuring risk management effectiveness

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Risks monitored and reported

More than ever, risk managers must expand beyond traditional areas of monitoring and risk reporting into compliance and strategic risk.

What are risk management teams monitoring and reporting on? How often?

Operational counterparty, reputational, liquidity and market risks are the five categories of risk most often cited when managers are asked what their team is responsible for monitoring and reporting.

Risks monitored and
reported

Risks monitored and reported

Interestingly, certain risk categories—such as compliance and strategic risks—do not rank higher. In our view, initiatives related to these risks should be an item on every risk management function’s project list. We also believe that meaningful reporting across risk categories will drive frequent interactions with the business and contribute to helping the business areas to adopt more risk-based decision-making.

In addition, just under half of risk managers have not yet begun, or are still working on, the establishment of key performance indicators (KPIs) to monitor risk management effectiveness.

Among the firms that have established KPIs, the most widely used metrics are those that track operational events and errors. We expect the variety of metrics used to increase over time.

Key risk metrics used
Key risk metrics used

“We have identified a number of key performance indicators (KPIs) and risks, but they are embryonic. It is pretty undeveloped and an item that I am currently working on.” – Survey participant



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