If organizations want to achieve better compliance and risk management, they need to change the way risk and compliance are handled within organizations. Organizations have risk and compliance departments, staffed with highly qualified people, and yet keep running into risk and compliance management related issues. The problem isn’t that their people aren’t qualified or working hard – the real problem is that the organizational framework used by most organizations for risk and compliance management needs to be changed.
Risk and Compliance Management vs. Silos
Problems in risk and compliance arise not because the employees are careless, the problem is that risk and compliance are being treated the wrong way. Most organizations end up creating a separate department to deal with risk and compliance. This is important – every organization in the financial sector needs to have people who are focused on risk and compliance. However, these people should be the last line of defense, not the first.
The problem is that departments end up turning into silos. Often, the risk and compliance departments do not get the information they should from the other departments. This is highly problematic, because it results in not just risk and compliance problems, but inefficiency and workplace politics as well. Every department wants to make sure that their department doesn’t appear to perform worse than the other departments, which creates a competition between departments, which results in the creation of silos.
True risk and compliance comes from within
There is a very simple way of breaking these silos and creating an organizational culture where risk and compliance management is an enterprise-wide activity. The answer is that risk and compliance need the focus of more stakeholders, aside from the people directly working on risk and compliance. This means that every department needs to give risk and compliance management due consideration, and make sure that the work being done in their own department is compliant.
It isn’t right to simply ask the compliance department to work harder. The focus should also be on ensuring that when other departments work, they work with compliance in mind. This means that there need to be people in every department who are focusing on risk and compliance.
Why is this important? Because people within the departments have much more knowledge about all the work going on in the department, which makes them better equipped to be the first line of defense when it comes to risk and compliance. As long as risk and compliance are external factors for the department, they will not take ownership of it. They will know that ultimately it is the duty of the department handling risk and compliance management to handle risk and compliance issues.
Making every department an active participant in risk and compliance
Thus, organizations need to focus on more cross-training, where some people from every department should be trained by risk and compliance experts. This is beneficial because it will allow the trained people to make their own departments more compliant. However, just providing people with the training isn’t enough. Risk management and compliance management are complicated tasks, involving a lot of work. One cannot expect all stakeholders to focus on risk and compliance while ignoring the main work of their own department. We can demand that they do so, but every manager knows that it will simply result in inefficiency. Either the work of the department will suffer, or the focus on risk and compliance will suffer.
That is why organizations need to focus on risk management solutions and compliance management solutions. A good compliance management system allows all the stakeholders to quickly access any file that they need, and provide updates to the rest of the organization about any pending or upcoming issues. Instead of creating an email about every small issue, every stakeholder from every department can simply provide updates to the same system, which will them disseminate the information enterprise-wide.
The people who are managing risk and compliance will be immediately able to give their input within the system as well. The speed and efficiency of risk and compliance management is increased manifold with automation based solutions, which allows stakeholders from other departments to easily contribute to better risk and compliance management. It will result in workflow that is natural, convenient, and enterprise-wide.
If you want to see what a risk management solution or a compliance management solution such as Predict360 can do for your organization, simply sign up for a 30-day free trial. You can also get a live demo of Predict360’s most exciting features by getting in touch with us through chat, or by filling the Contact Us form.