As the year ends, managers are working on creating plans and strategies for 2020 and finalizing the budget for the next year. Risk and compliance managers want access to the latest risk and compliance technology that will increase productivity and accuracy, but they are often limited by the budgets prescribed to their departments. It can seem difficult to expand the technological arsenal of the risk and compliance teams while facing risk and compliance department budgets.

There are three important factors that can enable businesses to implement risk and compliance management technology while barely increasing operating costs:

  • Reducing compliance and risk operational costs
  • Minimizing risk and compliance related financial losses
  • Choosing a cloud solution that can be deployed in weeks versus months

Reducing risk and compliance operational costs

Instead of focusing on the expense associated with the implementation of risk and compliance technology, businesses should look at what the overall effect of the implementation will be on organizational performance. Labor continues to be the biggest cost driver in risk and compliance, as these departments run principally on the efforts of the risk and compliance teams and often do not have any infrastructure of specialized technology in place.

Reducing risk and compliance personnel to reduce costs is unthinkable due to the impact it can have on the organization – no company wants to increase the risk of non-compliance or an undetected risk causing irreparable harm to the organization. Instead, what businesses can do is ensure that the time of their risk and compliance team is being used efficiently. Whatever can be automated should be automated, and only the matters that require the skills and expertise of the risk and compliance teams should require their attention.

Reducing risk and compliance personnel to reduce costs is unthinkable due to the impact it can have on the organization – no company wants to increase the risk of non-compliance or an undetected risk causing irreparable harm to the… Click To Tweet

When an organization selects the right risk and compliance management solution, it empowers risk and compliance teams to be more productive – reducing time spent on menial and administrative tasks. With risk and compliance technology in place, teams have more productive hours in their day because they are spending fewer hours on low-value tasks. This means that the cost of the labor hours required for every task will be significantly decreased by technology. We can estimate these changes by creating a chart that shows the differences in hours and associated costs:

risk and compliance cost

These numbers are based on our experiences deploying risk and compliance technology across many banks across the country. If you would like a more in-depth look at how these numbers will look for your organization, get in touch with our experts.

This change in the number of hours required per task will enable risk and compliance teams to focus on the big picture. Instead of trying to maintain a risk and compliance framework using general-purpose software solutions and thousands of files, they will be able to focus on delivering more value to the organization.

Risk teams will be able to increase the number of risks they monitor while having more time to mitigate the risks detected. They will be able to spend more time with different departments to understand the risks every department faces. The compliance team will have more time to instill a culture of compliance throughout the organization. They will have more time to focus on business processes to unearth compliance vulnerabilities and fault lines.

Minimizing risk and compliance-related financial losses

Another way to implement risk and compliance technology without offsetting the risk and compliance budget is to focus on the financial losses related to risk and compliance management. This approach is often successful because it enables risk and compliance managers to deliver a quantitative case for technology implementation instead of a qualitative one. Instead of simply explaining that the technology will provide benefits, the boardroom can be shown the financial losses which could have potentially been avoided if the risk and compliance infrastructure was upgraded.

There is a challenge with this approach, however – it focuses on just one benefit of the risk and compliance technology. While the reduction in risk and compliance related losses is significant, just as significant is the impact the technology has on risk and compliance productivity and efficiency. This technology can enable new products and services because it allows businesses to deliver risk management and compliance at speeds that simply were not possible before.

Choosing a cloud solution that can be deployed efficiently

One of the best strategies to minimize the costs of implementing risk and compliance technology is to choose an out-of-the-box, cloud-based solution. Cloud solutions have several advantages over on-site solutions, such as:

Infrastructure-free

On-site solutions require an infrastructure during implementation. The client organization doesn’t just pay for the software solution, they also pay for the hardware that will run the software. This means buying servers, networking products, and then creating the framework that can support the software. This is a significant part of the total implementation costs.

Since cloud solutions operate on the cloud, they require no such infrastructure. Organizations will not need to buy any hardware – they simply need to ensure that all the computers that will access the software have an active internet connection. Cloud solutions thus completely eliminate a significant portion of implementation costs.

Deployment speed

On-site solutions require the vendor’s experts for implementation. Since the implementation includes both hardware and software, this can be a long and expensive process, where the client must pay for not just the technology and hardware being implemented but also for the consultants. This means the business must pay for the consultants, must pay their travel costs, and then also pay for their hotel rooms while they are in town.

On the other hand, cloud solutions can be rapidly deployed. Most of the work is done at the vendor’s site – the solution is customized and prepared by the vendor’s employees in their own office. This doesn’t just significantly reduce the implementation cost; it also makes the whole process faster. Instead of creating the hardware and software infrastructure on-site, the customized features are added to the existing cloud solution and the client is given access to the solution.

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Scalability

The nature of cloud solutions also makes it easier to scale them up or down as required. An on-site solution requires a long-term commitment, which translates to a major impact on the budget. Businesses must set aside millions of dollars to ensure that their on-site solutions are maintained for the next few years.

Cloud solutions can be procured on a subscription basis, which significantly reduces costs and increases scalability. Our solution Predict360 is a great example of this – it has multiple modules, including risk management, compliance management, audits, vendor risk management, policy management, and much more. Businesses can choose to start with a particular function and scale up as they grow their risk and compliance practices. Instead of committing to millions of dollars at once, businesses can gain access to the tools they need at a fraction of the cost of an on-site solution.

Are you trying to see how you can upgrade your organization’s risk and compliance framework without going beyond the 2020 budget? Get in touch with our team for a detailed breakdown on how we can make that possible while delivering an A.I. powered risk and compliance solution.