Integrating Risk Assessments and Compliance Testing

Within a corporation, the risk department conducts risk assessments. Their objective is to understand the organization’s risks and evaluate whether additional mitigation measures are necessary to keep the organization safe. An organization’s compliance department performs compliance testing. The compliance team’s objective is to evaluate the organization’s compliance framework’s performance and determine whether further controls are required to guarantee adequate compliance levels.

The fact that distinct departments and teams carry out both processes is essential. Risk departments are concerned with the organization’s risk framework, whereas the compliance team is concerned with the organization’s compliance framework. The risk department conducts risk assessments using its methodology and publishes its findings by established risk management guidelines. The compliance department’s methods drive compliance testing and defined compliance management standards present results.

This is the point at which the separation between the two processes becomes apparent. While these processes are closely related, they are distinct in their techniques and functions. In other words, departmental silos obstruct the integration of both methods. This leaves one unanswered question: why should risk assessments and compliance testing be combined?

The Connection Between Risk Assessments and Compliance Testing

As distinct as risk assessments and compliance testing may appear, they are inextricably linked. Risk assessments are conducted to ascertain the level of risk to which a business is currently exposed. If a violation is detected during compliance testing, it directly increases the organization’s risk level. Similarly, if an issue is detected during risk assessments, it will be reflected in compliance testing, as more significant risks will necessitate the implementation of more effective controls.

Integrating risk assessments and compliance testing is the next step for firms to optimize their efficiency and effectiveness of risk and compliance frameworks. However, incorporating them into existing risk and compliance management processes is not straightforward. There are tools for two distinct departments and these are not easily combinable. They exist as two unconnected parts of a puzzle, even though the puzzle will only be completed when these two pieces are united.

Platforms for Risk and Compliance Management

By leveraging cutting-edge technology, modern risk and compliance management platforms provide a transformational experience for risk and compliance management. Integration is a fundamental idea that drives the design of current risk management and compliance management platforms.

Model of Integrated Risk and Compliance

Risk and compliance platforms in the modern-day integrate risk and compliance data. The approach unites a variety of risk, compliance, and governance functions into a single model. It is not coincidental that this approach gained popularity only after the arrival of risk and compliance technology; it can be applied effectively only with the assistance of current technology.

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Instead of developing numerous discrete tools to support the innumerable risk, compliance, audit, and governance activities in every organization, modern risk, and compliance platforms standardize processes and provide a centralized platform for managing all associated domains. This is also critical for risk assessment and compliance management integration.

Developing an Integration Data Layer

Firms must establish a data layer that serves as a conduit between the two processes to integrate risk assessments and compliance testing. All data points collected during risk assessments must be accessible during the compliance testing process. All data points collected during compliance testing must be accessible during the risk assessment process.

This means that rather than merely connecting risk assessments and compliance testing, the goal should be to distill the data and insights from both processes and make them available to both. This means that all data gathered during compliance testing is incorporated into the compliance management framework. In contrast, all data and information collected during risk assessments are incorporated into the risk management framework. Because these two frameworks are integrated into the same platform (as part of the integrated risk and compliance paradigm), they may readily share data. This has a significant impact on manual and automated operations and reports alike.

Optimum Utilization of Existing Processes

Integrating risk assessments with compliance testing improves the efficiency and productivity of existing human and automated procedures.

Making Manual Processes Faster and More Effective

The centralized storage of risk and compliance data enables risk and compliance professionals to include risk and compliance data into manually prepared reports. Without integration, this procedure is cumbersome; the risk team must wait for the most recent compliance testing. They must next comprehend the compliance testing results and their significance to risk assessments. The appropriate data must then be taken from the compliance assessment and reformatted to be usable with the risk assessment technique. The compliance team must follow a similar approach, manually pulling data from risk assessments and converting it to a format suitable for compliance assessments.

Contrast this to the workflow that results from the integration of risk assessments and compliance testing. The risk team merely needs to open the compliance testing report within the risk management platform, and all of the necessary information is immediately available for import. Similarly, the compliance team may quickly access the most recent risk assessments and extract the pertinent information.

The Advantages of Automated Reporting

Automated reporting provides even more benefits than manual reporting resulting from the integration. The risk and compliance platform combine data from risk assessments and compliance testing in an automated fashion. This is accomplished by risk maps — on the forum; there is a map of the relationships between controls, risks, processes, and documents. When the risk assessment team begins an evaluation, they tag all of the risks being evaluated. These risks are associated with controls inside the organization’s risk and compliance framework. If a new assessment alters a risk, the compliance team is notified, as the compliance team will need to prioritize compliance testing for that control.

Interested in learning more? Download our latest e-guide on integrating risk assessments and compliance testing for a detailed look at how these processes can be integrated.