Risk and compliance are intertwined; while they may both have different natures, both domains are ultimately focused on ensuring business continuity. Businesses often have different teams for risk and compliance; because both things require different skill sets to manage. Risks are managed by looking at the external environment of the business and assessing potential threats, while compliance is managed by looking at the internal environment of the business and assessing potential weaknesses.

Recent developments in technology have made it possible to combine risk and compliance data to gain enhanced insights about the market. Risk and compliance can finally be synchronized according to organizational goals and be used to uncover trends, patterns, and metrics which help businesses act proactively.

Integrating risk and compliance requires groundwork but the benefits far outweigh any efforts required. There needs to be a bridge between risk and compliance. There are risk and compliance management solutions that provide a single platform to manage all risk and compliance related tasks. This groundwork is necessary because real-time risk and compliance data needs to be analyzed and compared to uncover insights.

Technology solutions that bridge the gap between risk and compliance have been in use in large enterprises for almost a decade now but they were not accessible for small and mid-sized organizations due to high implementation costs. Businesses would have to spend millions to implement such a system. The advent of cloud-based risk and compliance management platforms and advanced AI and machine learning technologies have eliminated this legacy barrier.

Technology solutions that combine risk and compliance management under one platform allow a business to have the best of both worlds. These solutions have separate risk and compliance modules located within the same platform. Click To Tweet

How risks affect compliance

Risks have a direct effect on compliance as well. As new risks appear, new regulations appear on the market to mitigate those risks. Governments reactively create rules and regulations. Whenever there is a new technology or a new product, governments must assess its potential effects on the market and create rules and regulations accordingly. If there is a new risk, then the compliance department can look at the risk and create protocols which help the business sidestep the new risks.

The Covid-19 outbreak is a good example of how a risk can reshape compliance. Businesses have created new policies related to working from home and sanitizing the office environment. These are new measures in compliance which have directly been introduced because of an emerging global risk.

The disconnect between risk and compliance

While most businesses realize that there is a direct link between risk and compliance, only a few have combined risk and compliance data to get better insights. This disconnect happens because most businesses do not have a unified structure for managing risk and compliance. The risk management team will be using its own risk management tools while the compliance team will have its own tools. The reports and data being created by these two teams are in different formats and cannot be directly compared. Making everyone work the same way will require a monumental effort if the process is handled manually. Both the risk and compliance teams will have to make compromises as well; currently they work the way they think is best in light of their nature of work, but to integrate they will have to work with the other department’s needs as well.

How technology bridges the divide

There is one way to connect risk and compliance painlessly – by bringing them both under the same platform. Technology solutions that combine risk and compliance management under one platform allow a business to have the best of both worlds. These solutions have separate risk and compliance modules located within the same platform. This means that the risk department will have its own risk tools and reports and they can work at higher efficiencies. The compliance department also has specialized compliance tools and reporting.

When risk and compliance data are analyzed in whole to uncover insights, banks benefit. When there is a potential threat anywhere in the risk or compliance domain, stakeholders from both domains are notified. If a department is generating an unusually high number of complaints the system will highlight the number of complaints. The compliance department can see whether a lack of compliance is causing the complaints, while the risk department can ensure there is a control in place if the higher number of complaints result in problems for the business.

Things are simplified for managers as well. The executive level managers of the organization gain a real-time view of how risk and compliance is being managed across the organization. They can intervene whenever required and ensure that all risk and compliance tasks are completed on time.

Are you wondering how risk and compliance data can be combined in your organization? Get in touch with our risk and compliance experts to see a demonstration of how Predict360 can help your organization.