Risk management isn’t something that can be focused on once or for a specified time period – it is a continuous process that always needs to run optimally. This is also why getting consistent improvement in managing risks can be such a struggle for businesses – it requires constant vigilance and commitment throughout the year. Most businesses have dedicated risk management framework personnel and these personnel act as the only defense the business has against risks. We do not believe that this arrangement is sustainable. Any arrangement that requires constant vigilance and depends entirely upon employees will eventually fail. People are fallible, and it is absurd to think that they will make no mistakes and miss no signs over the period of a year. These mistakes can end up costing businesses a lot of money.

There are 4 necessary components a sustainable risk management program needs to deliver consistent results:

  • Augmenting employees through automation
  • Providing tools to manage risks
  • Predicting risks to mitigate them proactively
  • Growing the organization through better risk management

Augmenting Employees Through Automation

Automation is necessary to sustainable results, but we need to understand the role of technology in delivering consistent results. Automation in risk management isn’t about replacing employees with computers or algorithms – it is about augmenting their performance. Augment is the operative term here. It means ‘’to add’’ to something, to increase something, and that is exactly what automation does for risk managers.

The smart approach towards risk management automation is to focus on the parts of the job that people do not do well. We do not need to replace these employees; we simply need to make sure that we fill the performance gaps they have. There are domains of compliance where people are much better performers than computers. Our ability to see the big picture and provide solutions is unparalleled and will remain unparalleled until we have artificial intelligence. Humans can collaborate, investigate, audit, and then create solutions which computers simply do not yet have the intellectual capacity for.

However, when it comes to tasks such as risk monitoring and notifications, computers are exponentially better than human beings. Software is tireless – it can continue monitoring every second of the day around the year without any lapses. Software solutions are also better at discovering changes and notifying relevant stakeholders. People only discover problems when they perform an audit. Software solutions continuously monitor millions of data points and thousands of documents and can instantaneously detect changes whenever and wherever they occur.

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Providing Tools to Manage Risks

Any business that wants to achieve the highest level of risk management productivity will need to use the right balance of technology and risk personnel. The most efficient approach is to assign people the work that they can do better and assign computers the work that they can do better. Anything that is simple and menial needs to be completely automated, so people can instead focus on the big picture and deliver the results that the organization needs.

Risk management technology fundamentally changes the nature of the job of risk managers Click To Tweet

Risk management technology fundamentally changes the nature of the job of risk managers. Risk managers shave years of education and experience in risk management, but they spend a lot of time in the office on simple administrative tasks and risk monitoring. Risk management technology automates the menial parts of risk management, which allows risk managers to truly use their education and experience. Instead of drowning in documentation and other administrative tasks, they have the day free to look at the different risks the office face and create solutions to mitigate them.

Predicting Risks to Mitigate Them Proactively

Risks need to be proactively managed and managing them proactively is only possible if the risks are being predicted with accuracy. Businesses that rely on a reactive approach to managing risks are vulnerable – it is always possible that a risk will actualize and create a problem that cannot be solved quickly enough. Predicting risks ensures that no matter how large the risks, the business will have time to mitigate it. It allows businesses to prepare themselves by studying the risk in detail, testing different solutions, and going over the details and strategy multiple times with multiple experts.

A.I. based risk management systems can help businesses accurately predict risk. There is a major advantage to using intelligent systems when it comes to risk management. These systems can monitor risks 24/7 without missing any changes. They can gather data from a wide variety of sources and immediately find links between risk factors and other components of the business. These systems also notify assigned stakeholders of any rising risk automatically, ensuring that corrective actions can be taken immediately, before the risk turns into an actualized danger for the business.

Growing the Organization Through Better Risk Management

Risk management is often seen as a necessary expense, but we can turn it into a competitive advantage. We need to stop thinking about risk as a cost center, and instead focus on how we can use it to become the market leader. Every business must navigate the business world and the world is full of risks. Businesses that know these risks can survive and grow, while businesses that do not know these risks are vulnerable.

Thus, the business which has the best risk management system in the industry will also be the business that can survive the biggest problems that hit the industry. There are many businesses that overtook the competition because they made the right choices at the right time. They weren’t clairvoyant – they simply had the best data about upcoming risks and knew what decisions needs to be taken in light of those risks. Automated risk management systems increase your organization’s ability to look ahead and plan accordingly.

Want to see what your organization’s risk department will be able to accomplish if they had risk management technology in their arsenal? Get a trial of Predict360 and find out.