Senior business leaders in financial services and banking say that the single biggest challenge they face is managing risk, according to a survey released today by accounting and advisory firm KPMG LLP.
The survey of 130 CEOs and other C-level executives also found that just over half 51 percent expect the U.S. economy as a whole to experience a substantial recovery in 2010, with a third expecting the recovery to be substantially complete by the end of 2010.
Among those surveyed, 70 percent said that managing risk was the biggest challenge they face in dealing with the economic downturn, followed by finding new sources of revenue growth (57 percent), complying with regulations (44 percent), raising capital (44 percent), and restoring investor confidence (44 percent).
Some 88 percent of the financial executives said creating risk management plans was among actions currently being considered, followed by IT solutions aimed at cutting operational expenses (85 percent), reducing the number of employees (82 percent), and cutting spending (81 percent).
While about a third said they expect the financial services industry to recover ahead of the U.S. economy as a whole, another third expect their industry to take longer to recover, while another third think it will recover on a par with the economy as a whole.
The downturn impacted the banking and financial services industry to a greater degree than most industries, and therefore it will take longer to fully recover, said Tony Anzevino, partner in charge of KPMGs banking and finance practice. Clearly [survey respondents] indicate that finding new sources of revenue and improving their management of risk will be major challenges in the year ahead.
The survey, conducted from May through July, included an equal number of banking executives and executives from other financial services firms. Just over a third of those surveyed work for financial institutions with revenues of over $1 billion.
KPMG LLP is the U.S. member firm of KPMG International, whose 137,000 professionals include 7,600 partners in 144 countries.
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