Most businesses realize the importance of data in this age. Data has become one of the most influential assets a business can have in its repertoire because it allows businesses to gain insights, predict trends, and detect vulnerabilities. Financial organizations understand how important and beneficial it can be for their organization to integrate its risk and compliance data. The challenge is that risk and compliance data, in its current form, is often difficult to integrate and implement into one cohesive view. An integrated data approach would require organizations to make structural changes to their data frameworks.

Siloed Information

The risk department and the compliance department in many organizations have their own approaches to data storage and analytics. While this may seem like a problem when the benefits of an integrated data approach are so well understood, it is also important to understand why risk and compliance data is often found in separate data silos. Earlier when information technology was emerging as an important tool for businesses to use, its most obvious benefits were in dealing with numerical data.

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Computers have always been fantastic at dealing with numerical problems and storing information. That is why some of the first computer solutions and software were related to accounting and keeping records. A lot of risk and compliance information, however, existed in the form of words and natural language. This includes most forms, documents, policies, and reports. So, while most businesses had dedicated software solutions for numerical data, most risk and compliance documents were still being created and managed manually.

Therefore, the risk department would have its own approach to create documents and store the information required and the complaints department had its own methodology. At that time, there were no integrated platforms or software solutions to store the data in a codified manner.

Better Technologies and Smarter Solutions

The situation regarding software that was capable of understanding and storing risk and compliance information has completely changed over the last two decades. There has been a major focus by software developers and scientists to improve a computer’s ability to understand human language and interact with people in a natural language. Modern risk and compliance solutions use many language parsing technologies along with new data frameworks to enable risk and compliance information to be understood by technology.

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Once computers begin to understand how to read risk and compliance documents and data, they can perform in-depth analysis as well as monitoring. A whole new Avenue of data analytics and predictions opens once the data has been properly integrated. The smartest risk and compliance solutions make the use of both artificial intelligence and human ingenuity to deliver a streamlined risk and compliance user experience.

Human ingenuity is critical when it comes to risk and compliance technology because whoever develops the solution needs to understand how risk and compliance processes work as well as the problems faced by risk and compliance experts. Businesses who develop dedicated solutions for risk and compliance hire risk and compliance experts with real world experience. Organizations that develop software to be used by financial organizations will often have people who have worked in banks, regulatory institutions, and investment houses as consultants. While the developers are ensuring that the solution uses the latest technologies to understand the needs of the user, these consultants ensure that the solution being developed will be useful under the real-world business environment.

Features Enabled by Data Integration

Once risk and compliance data are on the same platform, the platform acts as a pipeline which can be used for enhanced risk analytics and predictions. A very common use of an integrated approach is to enable risk predictions. Risk prediction engines take in the latest risk metrics and combine them with new compliance data and reports to highlight emerging vulnerabilities in the risk and compliance framework. Similarly, the job of compliance monitoring can be offloaded to computer systems.


Enterprise Risk Management Software

Another major advantage of taking an integrated data approach to risk and compliance is that it allows businesses to lower risk and compliance management costs. There are many redundant processes among the risk and compliance departments which are eliminated once both are on the same platform. Automation ensures that a lot less work needs to be done to accomplish the same results as before. An improved risk and compliance management framework also means fewer compliance violations which results in lower financial penalties by the regulatory bodies. Improved risk management and prediction technologies allow the business to mitigate risks quickly, which further reduces potential losses the business can face in the near future.

The real-time nature of these platforms, as they allow management to monitor risk and compliance metrics across the organizations in real time, will also be very important for businesses in 2021 onward. As we emerge from the pandemic and the economy recovers, banks and financial institutions will require enhanced risk intelligence so they can understand the emerging risks they need to mitigate in the environment.

Interested in seeing what an integrated risk and compliance solution can do for organization? Get in touch with our risk and compliance experts for a demonstration of the predict360 risk and compliance intelligence suite.