How to Reduce Risk in FinTech Operations

As regulatory scrutiny increases, FinTechs are focusing on optimizing operational risk practices and minimizing potential operational risks. Risk mitigation is an essential responsibility for operations management. Hiring professional risk management assistance and implementing an established and verified risk assessment methodology are common first steps in risk mitigation. There really is nothing unusual with this strategy, but the higher risk exposure is frequently found in the organization’s operations processes – or absence thereof.

Operation teams are often responsible for process management. In such circumstances, the level of risk is proportionate to how clearly defined the process is and whether the procedure is formalized, in part or entirely. Here’s how operations executives can get a jump start on risk reduction now by analyzing, risk-ranking, and optimizing their operations:

Begin by Automating Your Operations

Once you are ready to automate, you have a birds-eye perspective of the organization’s overall risk, a breakdown of your operations procedures for reacting in specific scenarios, and a tiered priority.

Automating financial activities does not imply turning over the task to robots. You possess operations teams trained to manage such eventualities and work incredibly hard to do this in the instance of most fintech firms. Typically, this is not a management problem. Instead, by automating the coordination and control of your most risky activities, you relieve your operations staff of numerous significant tasks:

They are no longer required to spend time on coordination

There’s no need to go to email threads, look for files, or move between tools. Everything resides in the automated method, where the job’s accomplished.

They are no longer required to “find things out”

A process’s proper reaction, procedures, and instructions are communicated.

They no longer require permission – until you need to provide it to them

As the director of operations, assuming you have approved the automation, teams may begin the process immediately without additional alignments, evaluation, or progress updates.

They are no longer required to plan their reaction

All procedures, steps, and “who’s responsible for what” for teams and leadership are apparent and transparent.

Make a Record of Your Real-Time Operational Procedures

Operations executives must begin recording their real-time operations procedures, especially those reacting to risk scenarios. Create a brief explanation of the process or planned reaction (for example, “market event information”), identify the right team (for example, “customer operations”), and estimate how frequently it happens monthly.

On the other hand, several procedures, such as compliance audits, will occur regularly and with more predictability, and most will be more irregular and asynchronous in their approach. Both are risk-related. Furthermore, determine which procedures provide the highest risk and expense of failure. Examine your list of operational processes. How many of the following poses the highest operational risk? Analyze the list in two aspects:

Maturity of automation

How many phases of the procedure are orchestrated sporadically by your team members when dealing with a certain operational scenario, such as via phone or email? Operations that rank higher in this category will become more susceptible to inaccuracy and need more resources.

Business criticality

In essence, how critical is this procedure to your company’s survival? Will you lose clients? Notoriety? Revenue? Processes with higher rankings in this category will necessitate the most prompt and well-coordinated reactions.

Risk is inherent in the fintech industry, and however, the most effective and dependable strategy to decrease operational risk is to automate your operations activities. Regardless of the external danger or condition, your operations staff are ready to take the appropriate measures every time — automatically.

How Predict360 Can Help Your Firm

Risk management must guarantee that your company has a safe and stable future. Predict360 Company’s risk Management Software guarantees that managers constantly have an insight of enterprise risk on a dashboard via the 360factors platform. New hazards are immediately represented in all risk metrics and are available to all authorized stakeholders. In addition, our cloud-based risk management software guarantees that the most recent regulatory concerns are regularly monitored and updated inside the system.

Interested to know more about how Predict360 risk management software can help your firm? Contact us for a demo on Predict360, our American Bankers Association (ABA) approved risk and compliance management platform.