Many banks still suffer from chronic underinvestment in the analytical tools required for measuring risk, while others are still figuring out how to translate data into key decisions used in everything from the loan-approval process to executive pay practices.

Those were the findings of a recent survey of 19 global financial institutions by the Risk Management Association and the consulting firm Oliver Wyman, which found that firms with the best track record of risk management had made early commitments to state, and stick to, their defined-risk appetites. The laggards undermined their own efforts on this front by failing to get senior executives to rally around the cause, by straying from "acceptable" geographic or product bounds, or by compromising the role of risk management in their organizations.

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