Blame Technology? Not so fast!

Many people are asking about the huge technology investments made by financial institutions to provide risk management capabilities designed to prevent major market catastrophes (like the one we are currently experiencing). Well, based on a recent article in Information Week entitled “Risk Management Failings Spur Big Financial IT Investments“, huge investments were made and continue to increase.  However, simply investing more in technology is not the full answer.  Many institutions had the risk information readily available, but chose to ignore it because of greed.  According to Gregg Berman, risk management practice head at RiskMetrics, this was certainly the case.  He states,

“Given the levels of technology that we have today, this crisis we’re going through is something that was very avoidable.  This was not a natural disaster. The writing was on the wall for quite some time and people ignored it.”

So, once again, superior risk management practices hinge on the abilities of the right people creating the right culture supported by the right infrastructure.  Without all three legs of the stool (people, culture, infrastructure), well, you know what happens – someone will take the fall.

Advertisements

About Wheelhouse Advisors
Wheelhouse Advisors LLC is the publisher of The ERM Current™, an online publication and blog dedicated to providing the latest updates on current trends in Enterprise Risk Management & Control. Wheelhouse Advisors provides cost-effective Enterprise Risk Management & Control solutions to both large and mid-size corporations. To learn more about Wheelhouse Advisors, please visit our web site at www.WheelhouseAdvisors.com.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: