Risk and compliance management are intrinsically linked. The rules and regulations that banks and financial institutions must abide by are designed to mitigate the myriad risks that are borne from financial activities. However, most banks struggle to synchronize risk and compliance work in real time. Compliance reports are looked at while doing risk assessments but there is very little real-time integration of risk and compliance data and activities. That needs to change.

Using an integrated platform that concurrently supports risk and compliance management and automatically combines the data and reports from both can deliver a significant improvement in the efficiency and productivity of both risk and compliance teams. Some of the biggest advantages businesses gain by combining both include:

  • Real-time risk assessments
  • Increased compliance ownership
  • Faster and better audits
  • In-depth insights

Real-Time Risk Assessments

Risk assessments are mostly retrospective. Banks look at the compliance reports and information over the previous few months and use this data to assess the risk exposure of the bank. The problem is that there is a major delay in the actual compliance issues occurring and them being factored into the risk assessment reports. The compliance department must first create its own reports and then the risk department needs time to integrate the information.

When risk and compliance are integrated into one collaborative system, banks gain access to timely compliance data which enables real time risk assessments. There is no delay in the process because no one has to wait for a report to be created. The moment a compliance issue is opened in the compliance management platform, the information is provided to the risk management platform, which immediately reflects the new data in its assessments.

Integrated risk and compliance platforms store risk and compliance data in a standardized manner. These solutions also perform analytics on the reports and data automatically. Click To Tweet

Increased Compliance Ownership

The reason many organizations are not happy with their compliance performance is that compliance requires the whole organization to take ownership of the compliance rules that affect their work. A manager or a single team cannot enforce compliance across the organization. Compliance teams realize why it is so important to comply with all the rules and regulations and understand the reasons behind the compliance too, but other employees may not.

Integrated risk and compliance solutions map risks to compliance issues, creating a direct correlation between compliance items and their raison d’être. Everyone can see why they need to ensure compliance. Previously, if an employee missed a crucial compliance process, it would only be visible if the compliance audit caught the issue when a compliance report was being prepared. Now, the issue will be instantly visible to other stakeholders on the integrated risk and compliance platform.

Faster and Better Audits

The efficiency of auditors increases exponentially when an integrated risk and compliance solution is being used in an organization. These solutions create an electronic trail of each action taken for risk and compliance. This means that the audit team does not need to go and ask people what they did to understand where the problem originated. They can instead look at the change logs and have proof of all actions taken.

The integration of risk and compliance data also allows auditors to quickly assess all the data and reports they need under one platform. Instead of long drawn out email chains, dealing with interdepartmental bureaucracy, and waiting to get reports, the auditors can access the risk and compliance platform and gain direct access to the information that they need. This allows auditors to audit more often. More importantly, it allows auditors to expand the scope of their audits, which allows them to discover more problems within the organization.

In-Depth Insights

The biggest advantage for executives is that integrating risk and compliance enables in-depth analytics and insights. It is technically possible to get insights without an integrated risk and compliance platform, but the practice quickly becomes unsustainable. Getting these insights would mean that after the risk and compliance teams are done with their respective reports, they will then have to rework the reports and data formats of both departments to be compatible, and will then have to perform analytics on them. Most risk and compliance teams are already burdened with critical business processes.

Integrated risk and compliance platforms store risk and compliance data in a standardized manner. These solutions also perform analytics on the reports and data automatically. The executive branch of the bank can create executive dashboards that show the results in real-time predictive analytics for the whole organization. The executive managers of the organization, armed with real-time insights and analytics, can take better executive decisions about the direction of the business and what it needs to perform better in the future.

On top of this all, integrating risk and compliance can actually bring the costs of risk and compliance down for an organization. Want to see how your organization can increase efficiency while reducing costs? Get in touch with our experts for a demonstration or discussion.