The global financial crisis has produced a heightened focus on risk management within organizations in the banking and finance sector, notwithstanding corporate real estate (CRE) functions. While there is no universal definition of risk as it relates to CRE, there is widespread acknowledgement of the need to identify a broader range of risks than would traditionally have been the case, and implement processes for managing them.
In some respects, CRE functions within financial services companies have an advantage of being able to borrow from established risk management processes existing elsewhere in the company. However, there is wide variation in the scope of practical measures that have been implemented. These can range from robust adherence of existing practices to far-reaching changes. Examples of systems being introduced include risk registers, enhanced IT systems, internal audits and new approaches to the selection of third-party suppliers. All of these also need to take into account the differing risk profiles and standards across geographies.
What is apparent is that in the banking and finance sector, establishing and implementing processes for monitoring and mitigating CRE risk is increasingly seen as an essential element of business practice. CRE teams cannot afford to be bystanders in the debate and must ensure that whatever processes are in place are relevant and strategically focused.
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