Looking through the holidays into 2010 there are four clear priorities for risk management that cut across all tiers of financial institutions.  Over the last year the pendulum has swung from the exotic to the pragmatic, from the chaotic to a new order within financial services.  The four priorities for risk in 2010 can be derived from the word DATA.  DATA can be broken down into data, analysis, transparency and accuracy. 

Risk officers across the industry will focus on their DATA, specifically as a function of the raw information (data), improving their interpretation of it (analysis), creating a higher level of vertical and horizontal understanding (transparency) and using risk data to hone in more closely on the truth (accuracy).  One might argue these objectives have always been the role of risk managers, but now it's different.  The difference is that when economies are expanding, cash is flowing and growth is in double digits, risk management takes a back seat to product innovation, financial engineering, marketing and politics.  Financial services companies will now focus on continued survival, stability and modest growth.  Lapses in enterprise risk management as a strategic priority partially led to financial crises with its unprecedented financial damage.  Now enterprise risk management, by necessity, will become part of every organizations DNA.  Organizations who accept this challenge as a driver of future growth will excel.  Organizations that create ERM window dressing will find themselves mired in among other things, a regulatory struggle. 

In 2010 an organization's risk management practices will impact their business models.  An ERM program that can be effectively articulated will favorably impact an organization's cost of capital as credit ratings agencies continue to refine the integration and use of ERM reviews in calculating bond and issuer ratings.  A solid ERM program may make the difference between an issue being rated BBB or A.  The quality of an institutions ERM program and management's ability to make investors understand it will impact an equities perceived value in the market.  Equity analysts will begin to consider, in addition to strict financials and growth estimations, a companies probability of remaining stable.  Stability means understanding and controlling for credit, market, operational and sovereign risks.  In 2010 the refinement of ERM programs within financial institutions will involve a shift of capital towards investment in data, analysis, transparency and accuracy.  These investments will translate into revenue growth and thus increased value.