While the fundamental theories of risk and compliance management that the industry operates on remain true, it is critical to remember that risk and compliance management strategies and methods developed decades ago incorporated the best tools available at the time. This is the era of advanced systems and solutions powered by artificial intelligence – the tools available today are significantly more capable. This necessitates the updating of risk and compliance frameworks with new blueprints.

While mitigating current risks is a prudent short-term objective, businesses require a long-term strategy that enables them to mitigate all future risks as well. Similarly, compliance management is an on-going activity that must synchronize with not only the changing needs of the organization, but also the changing regulatory framework. These five steps can significantly improve the risk and compliance management capabilities of organizations.

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Step 1 – Automate Monitoring

Businesses should prioritize automating risk monitoring. The era in which risks were manually and inefficiently monitored has long passed. We now have the technology to automate the entire risk management process, and it is neither prohibitively expensive nor difficult to implement. Manual monitoring will never match the efficiency of automated monitoring. Similarly, A.I. powered systems can vigilantly and continuously monitor the entire organization for compliance failures. To approach the efficiency of computers, businesses will need an unsustainable number of employees to constantly monitor every known risk and compliance issue, and they will still fall short of what A.I. powered systems can accomplish.

Automated monitoring has a remarkable effect on risk and compliance management. Rather than being caught off guard by growing risks, each authorized stakeholder is automatically notified when any risk exceeds a predefined threshold, ensuring that all risks are mitigated and controlled as quickly and efficiently as possible. Similarly, instead of having to manually discover compliance issues by poring through spreadsheets and documents, the compliance team is automatically notified of any compliance issue detected by the system.

Step 2 – Increase the Participation of Stakeholders in Risk Discovery

Increased stakeholder participation is the simplest way to improve the risk management framework. Management is often blindsided by a risk or compliance problem that employees already knew about. If management wants to learn more about the risks and compliance issues that the business faces, they must establish a mechanism for collaboration and the sharing of information. Open communication results in better collaboration between the departments and enhanced visibility into risk and compliance for management.

Step 3 – Establish a Risk Priority List

Risk prioritization and ranking are critical components of any risk management framework. There are minor risks, major risks, and a variety of other risk levels. Businesses must manage these incidents in accordance with their severity. If a significant risk is increasing, the entire business must immediately mitigate it; minor risks, on the other hand, can be dealt with on a lower priority. Simply being aware of all the risks that affect the business is insufficient; management must also categorize the risks according to the threat they pose to the business’s future.

Businesses should prioritize automating risk monitoring. The era in which risks were manually and inefficiently monitored has long passed. Click To Tweet

Step 4 – Identify and Communicate Risks

The simplest way to increase employee risk awareness is to make risks visible. People will underestimate the importance of risk management if risks are merely an ominous threat that they cannot see. Which is why risk management solutions are so effective at helping businesses manage risks more effectively. They end up making all risks visible to all users who have been assigned. With a single click, management, employees, and anyone else who has been authorized can view all the risks affecting the business. Predict360 Risk Management, our own solution, even displays risks on a dashboard immediately upon logging in. This ensures that risks are always prioritized and managed around the clock.

Step 5 – Enable Ownership of Risk and Compliance

Businesses frequently discuss encouraging risk ownership, as this has been shown to be the most effective risk management strategy. Businesses must go beyond encouraging risk ownership and instead enable it. Do not simply tell employees that they must take risks; empower them with the tools and access necessary to do so. Provide them with a system that enables them to monitor and report on risks. Provide them with a collaborative environment in which they can discuss risks with their coworkers.

Similarly, not only should compliance issues be visible to the organization, but each employee should also realize their own responsibility when it comes to compliance issues. Making the compliance mechanism visible and allowing people to see how one compliance issue impacts different processes helps people understand the importance of compliance.

These five steps will result in a profound change in the way risk and compliance are managed through the organization. These five steps ensure that risk and compliance issues are monitored 24/7, that everyone is aware of the responsibilities when it comes to managing risk and compliance, and management is always aware of all the risk processes going on throughout the organization.

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Interested in seeing what a risk and compliance management solution can do for your organization? Get in touch with our risk management experts for a demonstration of Predict360, the American Bankers Association (ABA) endorsed solution for risk and compliance management. Discover how risk technology can not only help your organization’s risk team improve performance, but also help your organization achieve its goals while managing risk and compliance costs.