Risk chiefs take financial industry by storm

Companies are fast appointing chief risk officers (CROs) to guide them through the increasing regulatory maze and oversee projects such as business continuity.

In a survey conducted by the Economist Intelligence Unit, 45 per cent of the companies interviewed had already appointed a CRO or equivalent, with the majority concentrated in the financial services sector.

The report predicts that CROs will become commonplace in other industries, with one in four firms planning to appoint a CRO in the next two years.

Earlier this month research found that nearly half of IT executives aren't fully aware of the standards and legal requirements that apply to them.

Ensuring the business is in compliance with regulation - such as the Sarbanes-Oxley Act - is the top priority for CROs, followed by keeping the board up to date on significant risks and ensuring business continuity, the research said.

Nearly two-thirds said a critical skill for risk managers is understanding broad business issues. Just over a third said technical risk skills are most important.

Integrating risk data from multiple systems and processes is the greatest challenge facing CROs in financial services companies, according to the survey of 137 global risk managers. Non-financial firms surveyed were more concerned about managing risk across globally dispersed operations.

Daniel Franklin, editorial director of the Economist Intelligence Unit, said: "Risk management must evolve to address a diverse range of threats. The CRO will play a pivotal role in bringing a more focused, integrated approach to risk management."