Organizations that automate risk management can identify potential risk events in real-time, strengthen controls, reduce errors and expenses, and improve efficiency.
Running a business comes with risks—circumstances or events—that may threaten your company's ability to continue operating.
Changing market conditions, breakthrough technology, encumbered operations, increased data availability, new value chains or business models, and evolving regulations transform how you operate your business, serve customers, and interact with third parties.
Risk management helps mitigate the uncertainty this causes.
But how do you manage all these risks in a dynamic business environment? Emerging automation technologies like robotic process automation (RPA), artificial intelligence (AI), and machine learning (ML) may help.
Organizations that automate risk management can identify potential risk events in real-time, strengthen controls, reduce errors and expenses, and improve efficiency.
This guide shares how to proactively plan for and automate risk for a more secure and profitable business.
Risk management involves applying resources to identify, assess, manage, and control the impact of business risks on a company's capital and revenue.
Automating risk management provides real-time visibility into the process, giving you valuable insights into potential or existing risks. Plus, it prevents mistakes that lead to financial catastrophes.
At its most basic, risk management automation streamlines tasks once handled by people—but doing much more.
For instance, conducting an internal audit—a traditionally labor-intensive and error-prone exercise—requires sifting through volumes of data.
Automation analyzes patterns in the data, spots potential problems in real-time, and makes predictions. It's revolutionizing how companies think about risk.
When the pandemic hit, companies from every geography and industry discovered that their disruptive risk management processes were outdated.
Businesses that relied on point-in-time assessments to monitor risk struggled with several blind spots as data quickly became stale and useless for decision making.
Human employees can't monitor risk continuously. Instead, effective risk management requires a better way of providing ongoing risk intelligence and continuous monitoring.
Traditional risk management models had four main issues:
That's why organizations want automation. Without it, companies will have to burden their risk management teams with an increased workload resulting from continuous monitoring.
In fact, Deloitte's 12th Global Risk Management Survey found 30% of firms employ RPA and other emerging automation technologies, while 50% will prioritize it in 2022 and beyond.
Besides overburdening workers, companies still have to learn to manage the volumes of continuous risk data, and use it to avoid disruption while increasing efficacy and improving resilience.
Automating the risk management process ensures businesses:
Banks, for example, can automate their credit risk management processes to protect themselves from credit risk threats like counterfeit documents.
Automation technologies like RPA, AI, and ML analyze customer applications to determine an applicant's risk. Within minutes, these tools flag fraud or credit risk threats—not just for one but volumes of applications.
Inscribe's fraud detection and automation platform helps financial services providers determine the authenticity of applicants' documents—like bank statements or utility bills. This minimizes their credit risk and saves them time and money.
Organizations today face higher and more challenging regulatory requirements or expectations, increasing costs, and demand for transparency, leading them to prioritize technology.
Companies automating risk management and regulatory compliance processes apply technology to monitor, control, and report on business risks quickly, flexibly, and cost-effectively.
Risk management automation streamlines and improves overall efficiency in multiple use cases, including:
You need a clear vision of the desired goal before incorporating an automated risk intelligence and action plan into your risk management process. To get there, you need to:
To survive in the new era of cascading risk, organizations need to identify potential risk events early to mitigate them to prevent business disruptions.
A risk management strategy that includes automation technologies detects cascading disruptions in your business processes, among third parties, and more.
Rather than waste hours on manual, repetitive tasks, free your team to work on more interesting tasks requiring human intelligence. This way, they can focus on keeping customers and business partners satisfied.
Ready to automate your risk management process?
Contact us to discover how Inscribe’s Fraud Detection and Automation can help improve your risk management processes.
Check out our other guides on financial risk management: