Whenever there is a paradigm shift within a domain it is necessary to change our perspective of what is possible accordingly. Whenever we set the standards and accepted performance levels of any process, we look at all the current available tools, technologies, and strategies to determine what will be the ideal we need to progress towards. Most banks have standards and requirements set out for risk management within their organization and many of them meet these internally set expectations. When they look at risk management software for banks, they are looking at them in the context of improving current risk management processes.

This distinction between a problem and a limitation is important because problems have solutions.

There are many limitations of currently accepted risk management practices, but these limitations are not thought of as limitations, because when the standards for risk management were set there were not many risk management solutions or technologies available. Some of these limitations and problems were considered unavoidable and thus banks did not attempt to solve them. This was not a major issue because these limitations were limiting the performance of all banks. However, now that risk management technology has brought about a paradigm shift in risk management there is a major competitive advantage in banks which use risk technology and those that do not.

Looking at these old problems in the context of new technology shows us how starkly different and more efficient risk management can be for the banking sector. Here are 3 problems, which weren’t even considered problems but rather limitations, but are now easily solved through risk management software for banks.

Managing risk requires input from the whole organization because risks affect every part of the organization. Each department would have to create risk reports for their own department. Click To Tweet

1 – Lack of coordination

When risk is being managed without risk technology, the only tools that employees have are general purpose office productivity applications like Microsoft Word, Excel, and Outlook. Managing risk requires input from the whole organization because risks affect every part of the organization. Each department would have to create risk reports for their own department. These reports were then sent to the risk management department within the organization, which processed them to create reports for the executive members of the organization.

Risk management software brings about a paradigm shift by enabling visibility across departments and allowing easy cross-departmental collaboration. Different departments do not need to send each other their risk reports – since all departments are reporting risks under the same platform, the data can be made visible to all stakeholders. The same platform can be used to create tasks, assign them to people across departments, and allow them to easily discuss the task and post task progression information to the same platform, visible to all.

2 – Outdated information

Most banks do not consider their reports to be outdated at all. They operate on the latest reports that have been developed by their risk departments. The problem is that, well, those reports are as updated as possible while working under a legacy risk management framework. Simply look at how the reports are created and the delays inherent in every part of the process become apparent. Each department takes data from its employees and creates a report – this process takes several days. These reports are collected by the risk department and then they go through the data, combining them to create an executive level report. This process can take multiple days and even weeks. By the time the report reaches the executive branch of the bank, the data in it can be anywhere from a week to a month old.

3 – Customer frustrations

Most banks, when they are looking at risk management software, are only thinking of the benefits that the software will be able to provide to the risk management team within their bank. They do not think that it will have any impact on customer satisfaction because risk software generally deals with internal banking processes. However, most banks discover that their customers are happier after they implemented risk management technology.

The secret behind increased customer satisfaction is that risk management software for banks makes risk and compliance management faster. Many bank processes take a lot of time because the bank needs to ensure compliance and mitigate any potential risks. The customer has to wait for the internal risk mitigation processes to be completed. Risk management software can bring about a significant decrease in the time it takes the risk team to handle risks, which can enable banks to deliver faster and more efficient services to customers.

Setting a new standard

When banks create standards for risk performance, they base the standards on what they can achieve using the resources that they have on hand. Risk management software for banks introduce multiple features and tools that augment risk managers and enable the risk team to achieve much more in significantly less time. Risk technology sets a new standard for risk management, at a level that was impossible to achieve before.

Wondering how risk technology can help your bank? Get in touch with our risk experts for a demonstration.