Today, business leaders and risk managers are required to navigate an increasingly complex risk landscape that is evolving at a rapid pace. Economic, environmental, geopolitical, technological, and other factors and their growing interdependencies are resulting in an ever-changing and expanding risk environment, making risk management extremely challenging.
The current volatile operating environment has questioned the very validity of the longstanding siloed approach to risk management. The situation has been further exacerbated by the COVID-19 pandemic which has amplified digital dependency and interconnectivity of people, processes, and organizations, thereby multiplying the points of intersections of different risks. Furthermore, siloed risk approach results in risk data being scattered across an organization, which acts as a major impediment to an organization’s decision-making capabilities.
To succeed in these uncertain times, organizations need to adopt an integrated approach to risk management, which will help create a single source of truth of all risk-related issues and data across different business units and functions. The integrated risk management (IRM) approach will considerably enhance an organization’s risk visibility and provide a better understanding of risk relationships and their cascading effects. In addition, by enabling prompt risk identification, organizations will be better equipped to reduce risk response time and take appropriate risk mitigation and remediation action.
It is encouraging to see that organizations are gradually embracing this forward-looking approach. The OCEG 2020 GRC Maturity Survey revealed that a number of businesses around the world are starting to integrate and standardize their governance, risk, and compliance (GRC) processes and technology.
Integrated Risk Program of the Future
A future-ready integrated risk program builds upon the existing risk management infrastructure and reconfigures it to make it more agile, unified, structured, and coordinated. This approach provides C-suite executives and board of directors with real-time actionable risk insights for improved decision-making and business performance. It puts in place a comprehensive integrative layer that provides deep visibility into an organization’s risk profile and risk relationships, along with an integrated issue and action management strategy that enables risk mitigation in real-time.
With the growing labyrinth of risks, companies are increasingly looking to tap technology-driven IRM tools that can significantly streamline and simplify risk management that is tied with business objectives and goals. These solutions, which leverage artificial intelligence (AI), robotic process automation (RPA), and such advanced and innovative technologies, seamlessly integrate with the larger IT infrastructure, dramatically improving an organization’s risk identification and mitigation capabilities, risk preparedness, and overall operational resilience and efficiency.
By 2021, Gartner expects more than 50% of large organizations to use an integrated risk management solution and projects the IRM solutions market to grow to $8 billion.
MetricStream offers a range of products and solutions that aim to enhance and streamline risk management activities and processes. The MetricStream Integrated Risk Solution enables organizations to manage both current and emerging risks across geopolitical, digital, strategic, third-party, cybersecurity, and compliance areas. It cuts across organizational silos by standardizing risk and control taxonomies and enabling stakeholders to effectively coordinate and unify risk management activities across all business functions.
Adopting a mature, technology-driven IRM approach is increasingly being viewed as a core competency for organizations to achieve their business goals. Once implemented, organizations should proactively conduct routine assessments to ensure the program’s effectiveness. In the long run, this will help an organization to better understand its risk posture, improve its risk appetite, and make well-informed decisions.
An effective IRM program needs to be complemented with a “risk-aware” culture across an enterprise along with well-defined roles, responsibilities, and accountability for employees. Educating employees on emerging risks and upcoming trends in the market, industry, and economy will help broaden the outlook of the workforce and boost their risk identification capabilities.
For diving deeper into IRM you can read MetricStream’s eBook, The Future of Integrated Risk Management, which details the best practices for a future-ready IRM program, provides quick tips for preparing an organization to adopt IRM, and delves into the organizational challenges involved in managing unknown-unknown risks, as well as the strategic direction of the financial services industry as it prepares for these risks and their domino effect.