Complimentary E-Guide: The Role of Technology for Regulatory Compliance in the Insurance Industry

Five Steps Towards a Better Risk Management Framework

Posted by: Sarah Hamilton

Home/ Blog / Five Steps Towards a Better Risk Management Framework

Risk management frameworks need to be updated based on the latest available technology. While the basic theories of risk management hold true, it is important to remember that the risk management strategies and methods devised decades ago took into account the best tools that were available for managing risks at the time. This is the era of advanced systems and A.I. powered solutions – the tools available now are much more capable. This means that risk management frameworks need to be updated with new blueprints. They should use technology to its full potential.

Every business wants to improve their risk management framework. While managing the current risks is a good short-term objective, in the long-term businesses need an approach that will help them mitigate all future risks as well. Creating such a framework is easier said than done. It requires taking a better, more modern approach towards automation, compliance, and risk management. Businesses can vastly improve how they manage risks with these 5 steps.

Step 1 – Automate Monitoring

Automating risk monitoring should be the topmost priority for businesses. The time when risks were monitored manually and inefficiently has passed by a long time ago. We have the technology now to automate the whole risk management process and the technology is neither expensive nor difficult to implement. It is impossible for manual monitoring to match the efficiency of automated monitoring. You will need an unsustainable number of employees to constantly look at every known risk to even be near the efficiency of computers, and it still will not be close.

The effect that automated monitoring has on risk management is astounding. Instead of being blind-sided by growing risks, every authorized stakeholder is automatically notified if any risk goes above a designated level, ensuring that all risks are mitigated and managed as quickly and efficiently as possible.

Check our recent post GRC Based Risk Mitigation Strategies.

Step 2 – Increase Stakeholders in Risk Discovery

Including more stakeholders is the easiest way to improve your risk management framework. If you have worked in multiple companies over a long period, this is something you have probably seen for yourself – management gets blindsided by a problem which employees knew about. This is because risk assessments are often done without the inclusion of all stakeholders, which means that only the top level risks stand out, and risks which may be bubbling beneath the surface remain hidden. If you want to know more about the risks that your business faces, you need to create a way for everyone to collaborate and provide information about risks.

Step 3 – Prioritize Risks

Prioritizing and ranking risks is an important part of any risk management framework. There are minor risks, major risks, and many other levels of risk. Your business needs to manage these according to their severity. If a major risk is increasing then obviously the whole business needs to immediately mitigate it, but minor risks can be dealt with on a lower priority. Simply knowing all the risks that affect your business isn’t enough – you also have to categorize them according to the threat they pose to the future of your business.

Step 4 – Make Risks Visible

The easiest way to increase risk consciousness among employees is to make risks visible. People will not realize the gravity of risk management if risks are just a vague threat they cannot see. This is why risk management solutions are so successful in improving the way businesses manage risks. They make all risks visible to all assigned users. Management, employees, and anyone else who has been authorized can see all the risks affecting the business with just a click. Our own solution, Predict360 Risk Management, even allows you to choose to view risks on your dashboard the moment you log on. This ensures that risks are always at the forefront and are being managed 24/7.

Step 5 – Enable Risk Ownership

Businesses often talk about encouraging risk ownership, because risk ownership has proven to be the most effective risk management approach. However, businesses need to go beyond encouraging risk ownership and instead enable risk ownership. Do not just tell the employees that they need to own risks, give them the tools and the access to own risks. Give them a system which allows them to monitor risks and provide information about them. Give them a collaborative space where they can discuss risks with their colleagues. If you build it, they will come.

If your organization is looking for ways to improve the enterprise risk management framework, get in touch with our team. The Predict360 Risk Management Software module has been designed to help businesses efficiently manage risks without requiring extensive or expensive implementation periods.

About the Company

360factors, Inc. (Austin, TX) helps companies improve business performance by reducing risk and ensuring compliance. Predict360, its flagship software product, vertically integrates regulations and requirements, policies and procedures management, risks and controls, audit management and inspections, and on-line training and qualifications, in a single cloud-based platform based on artificial intelligence.

Remain up-to-date on industry news/updates through our Twitter & Linkedin profiles.

Request a Demo

Request a Demo

Complete the form below and our business team will be in touch to schedule a product demo.

By clicking ‘SUBMIT’ you agree to our Privacy Policy.

Stay Informed About Upcoming Webinars & Events!