While analytics has played a greater role in risk reduction over the past decade, many organizations acknowledge that they still need to step up their efforts to leverage data within their risk management programs. That was one of the insights culled from a recent survey on the evolving role of data and analytics in mitigating risk, conducted by CFO Research in collaboration with PwC.
Most of the 154 senior finance executives surveyed say that their companies should spend more on risk management, including supplying managers with such tools as risk dashboards and data visualizations, as well as training them to use risk analytics. One in 10 respondents (12 percent) believes that his or her company has an “excellent” risk management program — 41 percent rated their company’s efforts as good, 31 percent as fair, and 11 percent as poor.
Currently, half of the C-suite and other senior managers at the companies surveyed do not use risk analytics in their decision making.
Identifying Data Gaps
How can finance executives become more adept at managing risk? The answer, according to most of the surveyed executives, is that the finance team should do more to improve the quality of risk data and analytics at their company. Survey respondents point to four areas for improvement: reliability, relevance, timeliness, and the cost of providing the data.
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