Navigating the financial services market might raise far more difficult questions than satisfying solutions, depending on the mood of the times. Who can stay on top of institutional compliance in the face of shifting political landscapes, new or changing banking rules, and continuing program management? Here are five great tips for GRC (Governance, Risk, and Compliance):
1. Look at the big picture.
GRC (governance, risk, and compliance management) is not a new concept. Financial institutions have had to comply with banking regulations since the beginning of the industry. GRC management has evolved throughout time to encompass a variety of facets of a financial institution’s operations, including:
- Compliance
- Risk
- Business continuity
- Audit
- Third-party risk management
- Incident management
- Operational risk
All of these components are typically managed by various teams. Financial organizations frequently employ a combination of technology to gain insight into numerous aspects of compliance operations, such as spreadsheets, emails, papers, and shared drives and files.
2. Make the most of your data.
You’ll need data to back up your judgments, even if you have an enterprise-level view. It’s difficult to interpret dangers and capitalize on possibilities if you don’t use data efficiently. Multiple documents and technologies make data analysis difficult, but having such data is vital to modernizing GRC activities. The data does not lie; it tells the truth.
One example of the danger in this area is a financial organization that exclusively secures data using a software security solution. Inventorying all software and solutions regularly, doing vulnerability scans, and testing controls are all ways to appropriately manage risk in this area. These activities will aid in the prevention of a data breach that could result in increased reputational problems in the future.
3. Encourage more internal collaboration.
In any organization, fostering cross-departmental collaboration can be difficult. However, when it comes to governance, risk, and compliance, this is especially crucial for financial institutions. The benefits of prioritizing the dismantling of organizational silos will be reflected in a more effective risk management and compliance program overall. Significantly improved internal collaboration:
- Multiple areas are involved in risk assessments.
- Management of incidents
- Controlling and preventing fraud
- Review of policy
4. Risks and controls must be properly mapped.
The best way to prevent gaps in your governance, risk, and compliance program is to appropriately map each risk to control.
While identifying risk is simple, determining the appropriate control to go along with it is a different story. Still, every risk necessitates a countermeasure, and every countermeasure necessitates a test. If not, you have a hole in your plan and will need to decide whether you want to take the risk.
5. Integrate technology to make things easier and more innovative.
The greatest approach to apply and streamline the best practices described above is through technology. Technology can drive innovation in two other areas of institutional compliance: third-party risk management and process automation, in addition to making daily GRC administration easier.
Institutions must gather sources of evidence to demonstrate proper management of the partner or vendor in third-party risk management (which is a big part of what banks must do from a regulatory standpoint). Technology systems can be set up to ask for certain papers that require annual maintenance regularly.
