7 Elements of an Effective Risk Management Program

Risk Management is crucial for sustained development of an organization. If you are able to avoid the risks and carry out tasks smoothly, you are sure to taste success in your endeavors. The market is flooded with a number of risks which need to be dealt with by making use a proactive approach. By employing an Enterprise Risk Management Software, one can eliminate risks from the system.

What are the critical elements you will need to effectively begin risk management?

Effectively beginning risk management is only possible if your business has all the critical elements in place. These critical elements require a dedicated risk management team, risk management tools, codified policies and procedures, and an organizational culture that promotes risk ownership. Managing risks effectively requires the whole organization to work collaboratively to achieve organizational goals. Each department within the organization needs to manage their own risks but that is only possible if management provides the right direction, training, resources, and tools for efficient and effective risk management practices. The fast pace of business that information technology has enabled requires businesses to ensure that they use risk management tools to be able to manage risks quickly.

Regulatory Bodies and Financial Risks

Regulatory bodies are tasked with creating compliances and enforcing them. These compliances need to be strictly followed by organizations for streamlined operations. In case rules and regulations are not followed by employees of an organization, it can lead to a fine. This could be a major setback for financial institutions like banks as it can tarnish their reputation. To avoid such risks, a proper approach and Risk Management Software are essential.

Check our in-depth blog Five Steps Towards a Better Risk Management Framework.

A financial institution like a bank faces different types of risks daily. Some common risks which need to be evaded for a financial system to grow are listed below:

1. Credit risk
2. Foreign investment risk
3. Liquidity risk
4. Market risk
5. Asset-backed risk

Depending on the policies created by a regulatory body, different institutions can be affected by the aforementioned risks. A good Enterprise Risk Management Software can go a long way in making sure that your organization remains safe from risks.

Elements of Effective Risk Management Program

A good Enterprise Risk Management Software should have the following seven elements for it to be most effective:

1. Artificial Intelligence: A Risk Management System Software powered by artificial intelligence will be able to predict patterns by observing trends. AI uses large amounts of data called “Big Data” to understand patterns and always makes better decisions than all other rudimentary methods.
2. Automation: AI powered software come with automation, which allows for faster completion of without the need of extra resources. The fact that automation cuts down on the need for resources makes it a cost efficient tool for risk management.
3. Risk Assessment Surveys: Surveys help in assessing risks in areas such as finance, operation, IT, brand, competency, internal audit, quality management, regulatory compliance, and reputation. An Enterprise Risk Management Software that can perform risk assessment surveys, offers much better results than elementary software prevalent in the market.
4. Integrated risk management methodology: A Risk Management Software which combines business process workflow and integrated management of change can go a long way in managing risks.
5. Corrective Actions: The Enterprise Risk Management Software enables an organization to continuously measure the effectiveness of the controls. It also instigates corrective and preventative actions directly from the analysis and results. Every risk, control, audit, corrective action, and task are connected to the requirements that drive the activity. The use of the Enterprise Risk Management Software produces seamless management of change when those requirements change.
6. Configurability: A configurable Risk Management Software allows you to use it as per the need of your organization. A configurable software can be more specific in addressing the risk management issues that you organization may face.
7. Proactive Operations: AI powered Risk Management Software monitors trends and allows you to be proactive with your work. This allows you to predict risk and found solutions for them in advance. Proactive operations are important for developing a sound and risk-free environment.

For an in-depth look into How technology quantifies risk in a way that it is always present, be sure to read our blog “Technology Based Perception of Enterprise Risk Management”.

Using AI based Enterprise Risk Management Software in an Organization

Incorporating Risk Management Software into a system requires you to identify all risks that are likely to impact the portfolio of your organization’s projects and investments. For employing this system, you should regularly update a comprehensive risk register to document all risks. Once the risks are identified, you should assess those risks and prioritize them according to their importance. Use of an AI based Enterprise Risk Management Software helps you greatly in controlling, reducing and mitigating all the possible risks. It can also be used for reporting risks and learning from them for improving the risk management process.

As we recently published “Five Steps of the Digital Risk Management Process” which can give you more better understanding.

The Predict360’s Risk Management Software is an efficient AI powered application that can help you in mitigating risks in your organization. By setting up a sound risk management base for your company, it will help you identify risks in the early stages and remove them by enabling you to take a proactive approach. For more information about Risk Management Software and how it can be further enhanced as part of an integrated risk and compliance management suite, visit https://www.360factors.com/.

About the company

360factors, Inc. (Austin, TX) helps companies improve business performance by reducing risk and ensuring compliance. Predict360, its flagship software product, vertically integrates regulations and requirements, policies and procedures management, risks and controls, audit management and inspections, and on-line training and qualifications, in a single cloud-based platform based on artificial intelligence.Remain up-to-date on industry news/updates through our Twitter & Linkedin profiles.