@Risk

We all have our favorite business oxymorons –you know, sayings like “A verbal contract isn’t worth the paper it’s written on,” or “We’re overpaying him, but he’s worth it” (both of which are attributed to Samuel Goldwyn, by the way). And, I’m thinking about oxymorons today because I just ran across something of a new one in a headline over at OpRisk&Compliance: “Risk management awareness improves, but budgets static.”

I read that, and I was struck by the contradiction. Yes, we understand more than ever that risk management is important to the future success of our company. But, no, we’re not going to increase expenditures in our risk management strategies.

The headline pulled me in, and it turns out that in this article, OpRisk&Compliance offers a preview of the first in a series of industry sector reports scheduled to be published over the next few weeks. This particular report reveals the results of a survey conducted by insurance broker Marsh and independent research group Ipsos. It takes a look at how risk and insurance professionals from more than 120 financial institutions across Europe view risk management, and here are a few of the intriguing –albeit frustratingly contradictory — key findings, as reported in the article:

• A full 87% of survey respondents said senior management now perceives risk management as more important,

• But only 47% said budgets for risk management expenditure were growing.

• 68% of those surveyed said they were concerned about the level of risk associated with their customers.

• When asked to identify the most significant operational risk over the next 18 months, 58% cited business continuity. Liability and legal risk (52%) and fraud (44%) were also cited as significant risks.

I suppose I should find some solace in the fact that 47% of those polled said their companies are beefing up risk management procedures. It appears that these organizations realize how vital it is to revamp risk strategies in this new economy. Considering that those polled were from financial institutions, it seems this 47% is also putting a priority on restoring stakeholder confidence. And, what’s more, I have to say that I’m pleased that these companies are wisely taking to heart another business oxymoron that’s a favorite of virtually everyone who works in the risk management field: “The only certainty is that nothing is certain” (Pliny the Elder).