Can Asian Banks Lead the Way in Integration of Risk and Finance?

In the past, the case of financial reporting and risk reporting have traditionally been undertaken by different teams within financial institutions, many of whom end up using different systems and data to create separate reports. This limited interaction between the two have resulted in failures of large institutions across the globe over the past years, stemming primarily from lack of communication between risk managers, senior management and the boardroom.

Ensuing legislation has led many to aligning risk and finance functions now, but it has become apparent that in many cases a siloed culture still prevails, even in areas where responsibility is supposed to be shared. It is strongly believed that financial institutions that align risk closest will benefit tremendously from the development of risk and return oriented views of the business, resulting in greater transparency and control over processes. It will also help to simplify financial and risk reporting and compliance. As David Craig, CFO at Commonwealth Bank of Australia, puts it, “risk and finance are inextricably linked.”

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