Risk libraries are quickly becoming a fantastic tool for banks that want to quickly upgrade their risk management frameworks. It is important to realize the role risk libraries can play in helping them not just mitigate risks better but also control risk management costs. However, one thing that should not be overlooked is that risk libraries are not just a useful– they also represent what is possible with modern risk management technology and how the risk management domain will evolve in the coming few years.

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How Risk Libraires Help Banks and Financial Organizations

Risk libraries are exactly what they sound like – a library of risks that have been compiled and curated by experts in the risk domain. They are necessary because financial organizations can only manage and mitigate the risks that they know about and have included in the risk management framework. There is always a possibility that they may have missed some important risks which are being tracked by their competitors, which can result in a significant competitive disadvantage.

Financial institutions can acquire risk libraries from industry experts that industry-specific risks. These risk libraries are not just reference guides – they include risk information and, in some cases, control information that can be directly included within the current risk management framework of the bank. These risk libraries are also updated regularly, ensuring that banks do not miss any new emerging risks which need to be mitigated.

Risk libraires are now being provided by many different industry experts. Two of the best risk libraries for financial organizations are currently being provided by the American Bankers Association (ABA) and Crowe LLP.

How Risk Libraries are Changing Risk Management

It was always possible for banks to get risk libraries from industry experts and then have their risk management team go through the library to discover risks that the bank should be monitoring. However, the recent rise of risk management technology and its adoption across the industry has completely changed the way risk libraries are being deployed in financial organizations. Instead of being an aid that can be used by the risk management team, the risk library can now be integrated directly into the risk management platform being used within the organization.

It was always possible for banks to get risk libraries from industry experts and then have their risk management team go through the library to discover risks that the bank should be monitoring. Click To Tweet

This means that instead of going through the time-consuming process of reviewing hundreds or thousands of risks, processes and controls, banks can now access the library from their risk management platform with just a few clicks. They can choose the risks that they want to integrate in their framework with a few more clicks.

The risk management platform then includes the risks and controls directly into the library. The risks and controls then automatically show up across the risk management platform and the risks that have been added can also be tracked through executive dashboards. The team simply needs to assign the new risk and control to existing processes and business units and then define the different values related to the risks.

Risk Management, Made Smarter

The way that risk libraries can instantly elevate the risk performance of an organization represents an exciting new frontier of risk management. Instead of having to spend a lot of time configuring things manually and reworking the entire risk management framework, modern risk management platforms make it almost trivial to add important risks and controls from trusted libraries to the existing risk taxonomy of the organization.

This is just the start – solution providers are now working on many more exciting features and technologies that could help banks improve their risk and compliance frameworks with minimal efforts. As the risk management framework moves to the digital age, all the advantages of working digitally are also becoming apparent to risk experts across the world.

This will help financial organizations become much more resilient in the future because it will help them manage and track emerging risks with ease. Instead of only relying on the risk experts working within the organization to stay abreast of the latest risk developments, banks will be relying on internal expertise as well as the information and insights being provided by the most trusted risk experts in the industry. Instead of spending many days or even months to understand what risks are not being tracked properly, banks and financial organizations can simply add the risks and controls they need from an existing library of risks.

Enterprise Risk Management Software

Interested in seeing how your organization can benefit from the latest risk technology and risk libraries? Get in touch with our risk experts to see how the ABA library and Crowe’s library can be integrated directly within Predict360 in just a few clicks.