RCSA (Risk Control Self-Assessment) reports are essential for controlling and reducing risks in the enterprise, but they can be difficult to administer and report on. Every business unit must complete self-assessment reports and send to risk managers, who will often aggregate the multiple assessments to produce a combined report on overall enterprise risk.

Challenges in Manual RCSA Processes

Businesses face several problems when they manage RCSA processes manually, such as:

  • Risk ratings that are inconsistent across business units
  • Subjective vs. objective evaluations
  • Non-standardized risk and control taxonomy
  • Duplicate controls and a disorganised approach
  • Old data
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Risk Ratings That Are Inconsistent across Business Units

Since each business unit assesses risks and controls in relation to its own business lines, the same risks can be measured and classified differently across business units. This holds true for both residual and inherent risks.

Subjective vs. Objective Evaluations

Risk assessments are subjective since they are primarily handled by the managers of each business unit. Without a common set of assessment criteria, business units must either assess assigned risks individually or determine how to assess risks and controls collectively.

Non-Standardized Risk and Control Taxonomy

Different business units can use different terminology to report on the same risks and controls. When the reports are analyzed and rolled up into an organizational risk analysis, this may lead to uncertainty and duplication. Additional effort is required because the risk manager must subjectively interpret the assessments or seek clarification from various business units.

Duplicate Controls and a Disorganised Approach

Sending various segments of spreadsheets and/or Word documents to different business units as part of a decentralized RCSA data solution leads to disorganized and muddled data, which increases the work that needs to be done. It can also lead to redundant controls, wasted time, and inaccuracies.

Old Data

The data is often obsolete by the time the business unit reports are analyzed and rolled up. Risk teams can only analyze historic data and have no way to detect emerging threats without a real-time data approach for RCSA processes and reporting.

RCSA (Risk Control Self-Assessment) reports are essential for controlling and reducing risks in the enterprise, but they can be difficult to administer and report on. Click To Tweet

How Automation Improves the RCSA Process

Many advantages can be gained by automating the RCSA process workflow. It’s critical to understand what is automated in the RCSA process and what isn’t. The assessments themselves are still handled manually by the risk managers and the different business units. However, the process flow is streamlined and automated to ensure higher productivity. This change results in:

  • Risk taxonomy and ratings that are standardized
  • Task management
  • Shared control library
  • Automatic report compilation and collation

Risk Taxonomy and Ratings That Are Standardized

A risk and control taxonomy that can be used by the whole enterprise is included in an RCSA management platform. Instead of requiring each business unit to independently create its own risks and controls in a silo, each risk is recorded in a central database. If another business unit detects a risk affecting it which has already been flagged by another business unit, they may simply pick the existing risk from the database. This ensures that standards related to a particular risk can be viewed in one location. The risk ratings are shared among the business units as well.

Task Management

The RCSA solution also includes tools that make risk mitigation simple for management. From the RCSA panel, managers can assign action items to risks and controls, allowing them to easily and efficiently ensure that risks are mitigated across the enterprise.

Shared Control Library

A shared library for controls is also included in RCSA solutions. This helps management to see how each control performs in various business units and identify any process-related inefficiencies.

Automatic Report Compilation and Collation

The RCSA solution can easily combine reports, collate data, and analyze it for enterprise risk management, thanks to the standardization of risk and control taxonomies. Since all of the risks and controls are connected together, management can easily see how each risk affects different business units, how different business units handle risks, how controls are communicated between departments, and several other details. The RCSA solution also aggregates risk ratings from various departments to produce risk scores for the entire company.

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Unlocking the True Potential of RCSA Reports

The assessments done during the RCSA process can provide invaluable insights to the management about what needs to be improved, but the process is held back by inefficiencies. These inefficiencies can be easily remedied by automating the RCSA process.

Interested in seeing how your organization can get more out of its RCSA process? The Risk Control Self Assessment Software from 360factors is designed to help banking, financial services, and insurance (BFSI) organizations develop their management processes and mitigate business risks. Managers can conduct analysis and drill down to the root cause using powerful analytics and insights capabilities through UI/UX dashboards, allowing companies to effectively handle risks and ensure that risk information is updated properly. Get in touch with our risk experts for a demonstration of our RCSA solution.