While this is a critical time for risk managers across the financial sector, it is crucial to realize that this is also an opportunity for risk managers to increase value for their firms. Businesses will demand a high level of risk knowledge and forecasting to negotiate the developing regulatory landscape while maintaining crucial customer service delivery. Risk managers can boost the value they bring firms by utilizing several tactics and tools.

Complimentary White Paper - Top 10 Risk Management Trends for 2022

Monitoring Key Risk Indicators (KRI)

KRI software provides risk metrics insights to executive decision-makers. Banks and FIs seek growth by conducting risk assessments and evaluations to decide which risks must be optimized to expand the business. KRI software can give real-time risk data, ensuring that decisions are made with the most accurate and up-to-date information possible.

Risk and compliance management systems can automatically create the relevant risk measurements. Rather than needing an employee to study reports and collect the relevant data manually, businesses can direct the risk management system to count a given activity. For instance, if management wants to maintain an up-to-date count of compliance concerns inside the organization, a manual approach will require an employee to investigate compliance issues throughout the organization and then write a report. A risk and compliance management solution can deliver the same response with a single click.

Additionally, digital KRIs (Key Risk Indicators) provides managers and board members real-time visibility. Rather than depending on manual report generation, current risk and compliance systems deliver real-time dashboards highlighting the most significant key performance indicators and other information. This system gives executives constant visibility into the bank’s essential domains and enables them to make more educated business decisions about their future.

Bank risk KRIs developed and tracked digitally have the potential to improve efficiency by revealing harmful trends and situations promptly.

Risk Appetites in Real-Time

A firm is aware of its risk tolerance and is familiar with risk drivers – the procedures that raise or lower risk. The trouble is that without a risk appetite framework in place, integrating the two is practically impossible. Examining present risk only serves to inform organizations about whether they are currently working inside their operational risk appetite targets. It does not indicate whether the organization is approaching a more perilous position, as the risk drivers — processes, tasks, and workers – are not tracked.

This is a critical time for risk managers across the financial sector, they can boost the value they bring firms by utilizing several tactics and tools. Click To Tweet

The second key impediment that firms must overcome is the periodic reporting requirement. A business’s risk appetite statement may be reviewed monthly or even quarterly. This system means that a corporation may achieve harmful risk levels above its recognized risk appetite without being aware of it until the risk appetite statement is submitted to management at the end of the month or quarter. This process might result in a crisis for the business, necessitating the suspension of existing activities to undertake an audit to ascertain what is causing the spike in risk levels and how they can be brought back to acceptable levels.

Advanced risk management tools analyze risks across the enterprise in real-time. Utilizing advanced tools eliminates the previously noted obstacle of a lack of metrics. Managers can correlate risk measures with various corporate hazards to gain a holistic picture of present risk levels and trends and projections regarding the evolution of risk indicators. Businesses can use these insights to monitor risk levels and all risk factors within the organization. Following that, a corporation might create a detailed risk appetite statement separated into several risk categories, each with its own set of data.

Enterprise Risk Management Software

Furthermore, risk management technology eliminates the requirement for annual risk assessments. Risk experts can also examine enterprise risk levels in real-time due to the real-time recording of all risk data. The technology provides management with access to a risk appetite statement outlining the business’s risk tolerance. Rather than addressing a risk issue that has been generating problems throughout the month and was only uncovered at the month’s conclusion, organizations can quickly address new risk-related matters. This system reduces the risk’s impact on the firm and makes risk mitigation more expedient.

Interested in seeing how modern risk technology can help your organization get more value? Get in touch with our risk experts for a demonstration of our American Bankers Association endorsed risk and compliance platform Predict360.