Risk management has become an important topic for financial institutes, especially since the business sector of financial services is related to conditions of uncertainty. The turmoil of the financial industry emphasizes the importance of effective risk management procedures. Consequently, this thesis studies “What are the critical success factors for effective risk management procedures in financial industries?” This research question was formulated in order to gain a better understanding of risk management procedures and to examine the critical success factors for effective risk management procedures.
To explore the importance of critical success factors in a practical context, we used the quantitative method of a self-completion questionnaire in order to collect data from a selection of financial institutions in Thailand. Financial institutions include banks, the stock exchange, insurance, stock securities, asset management and so on. Due to the fact that top-level management is directly responsible for risk management, the target groups included a range of positions from supervisors to board of directors.
This research found a set of seven critical success factors which can be used as a guideline on how to increase the effectiveness of risk management procedures. These factors are (1). Commitment and support from top management, (2) Communication, (3) Culture, (4) Information technology (IT), (5) Organization structure, (6) Training and (7) Trust. Because risk management is an important part of the financial industry, effectiveness is vital to increase project success. These seven factors can increase the effectiveness of risk management procedures from the perspective of the financial industry in Thailand.