The three risk management issues most exercising the minds of Australian financial institutions are corporate governance, talent management and technology, according to Aon.

Tim Farren, head of Aon’s national financial institutions practice group, told delegates at last week’s Australian Professional Indemnity Group conference in Sydney that reputation risks are at the heart of the industry’s concerns.

“Issues such as corporate mishaps, wayward business conduct and product quality have caused significant damage to the reputation of numerous Australian and international companies,” Mr Farren said.

“And the rise in stakeholder activism and its impact on brand and reputation is an issue banks and financial institutions are watching closely.”

Aon’s latest Australasian risk management and total cost of insurable risk survey highlights several other risk management issues, including margins, the credit market cycle, the changing macro-economic scene, climate change, operational risks, consolidation and catastrophes.

Mr Farren told the conference the rise of the “BRIC” (Brazil, Russia, India and China) economies is creating compliance issues for Australian financial institutions with overseas investments and partnerships. “Where does the compliance responsibility fall, and is it effectively managed?”

He also detailed countless other regulatory and compliance obligations that are adding increasing complexity to risk profiles, including the ASX best practice recommendations on corporate governance, Sarbanes-Oxley, International Financial Reporting Standards and Basel II.