We are living in a volatile world. Risk leaders know that this is especially true in governance, risk and compliance (GRC) where fast changing regulatory, compliance and cyberrisk threats reset challenges daily.
The global health crisis has only accelerated the onset of these challenges as companies embraced new ways of working and faced more cyberrisk threats than ever before. Nearly all aspects of our lives have transformed, from how we interact and work together to how we leverage technology.
While there are certainly tools to help simplify complex challenges—and these are essential to success—part of owning GRC responsibly is adopting a mindset of growth that turns risk into a strategic advantage. This requires leaders to take three key steps:
1. Manage Risks
The first step to is to take control of risk in the system. This means using the traditional approach to risk management by simply protecting the business and meeting regulatory requirements, and then going a step further.
Risk managers know all too well how much data sits in a company’s risk system—compounded by third party partners, there are so many datapoints to understand and align to keep risks under control. To truly manage risk, organizations need to bring together structured and unstructured data, break down silos and unite compliance, risk, audit and cyber teams to integrate the risk management strategy.
Build super-users of risk management tools within your organization and harness the collective intelligence of your enterprise to bring together thorough data. Use simple tools that are so accessible that even front-line teams can easily add risk observations to build out risk data. This will speed adoption across the entire organization and help risk management teams have full visibility.
2. Use Technology to Embrace Potential Risks
In this fast-paced world, the only way to take advantage of risk is to see it coming and have quantifiable insights that allow you to be proactive—or even better, weigh your options on how to turn that risk into a reward. Technology is essential to moving past implementing the foundational elements of risk management strategy and getting a step ahead of emerging risks.
Consider the potential of automated intelligence in a risk management task. For certain types of risk management processes, there are hundreds of thousands of documents that require review. What once took entire teams of people to conduct human review, AI can now perform quickly and identify patterns and risks in vast volumes of data as well as recommend next steps for leadership. Instead of spending time on ineffective manual processes, risk teams equipped with strategic intelligence can make informed, risk-aware decisions that are informed by real-time and contextual datasets.
Speeding agility in risk data intake and analysis with technology also speeds mobility for risk decision-making. Today’s risk world moves quickly and demands an agile approach. Risk leaders must constantly evolve, iterate, test, learn and stay current as risks and regulations shift.
3. Thrive on Risk
To move onto to the third stage, the role of risk must become more purposeful. Risk management must move beyond the traditional GRC mindset of mitigating risks, managing regulatory and compliance pressures, and leveraging data and technology to get ahead of emerging risks.
When an integrated risk management strategy is embedded into the DNA of an organization, the result is increased business performance and growth and profit with purpose. This is how organizations can thrive on risk.
Risk leaders can engage colleagues in the boardroom to set sights on a higher level of strategic risk decision making. Leverage your organization’s purpose and mission to tackle ESG goals and use the company’s vision to build more responsible corporate growth.
Quantitative risk data can help facilitate C-suite buy-in—after all, you cannot manage, embrace and thrive on what you cannot measure. While traditional risk management largely gives attention to areas where quantification is easy to conduct, such as market and credit risks, a dynamic approach offers far more opportunities for threat detection and mitigation. Use tools that help calculate business risk to elevate risk impact and make a case for being proactive against risk threats, getting more risk support, or even better, finding strategies for turning risk into reward.
Achieving governance, risk and compliance goals is a journey, not a destination. Goalposts constantly move and risk landscapes become increasingly murky with more data. Following three steps along this pathway—manage, embrace and thrive—can help your risk team not only address the current slate of challenges, but also help you prepare for what’s next.