Can ERM Software Really Help Banks Mitigate Risks?
For generations, banks, credit unions, lenders, and other financial institutions have used a business model that, while profitable, carries a plethora of risks and vulnerabilities. Stated simply, dealing in money makes you a target, leaving an organization highly vulnerable to theft, fraud, and financial loss. Financial institutions must confront these risks on a perpetual basis, making effective risk management a key component of an organization’s overall business strategy. This leaves many business leaders wondering how they can approach risk mitigation more efficiently and that is where the right software can come into play.
Enterprise Risk management software (ERM) platforms can give a financial institution a leg up on criminals and other bad actors who are continually targeting banks and their interests. But how exactly does ERM software help banks mitigate risks?
What is ERM Software for Banks?
Risk management software refers to a type of business software that has gained a fair amount of popularity over the past decade. The COVID-19 pandemic really pushed risk management software into the mainstream as business leaders collectively realized their many vulnerabilities. This prompted a shift in focus toward risk management as business leaders sought to minimize losses and maximize gains wherever possible.
Risk management software is designed for use in all industries, whether the company is a new startup, a mid-sized enterprise, or a massive and well-established corporation.
‘How Does ERM Software for Banks Help With Mitigation?
These complex software platforms are outfitted with a wide variety of features and functionalities that can streamline and supercharge a company’s efforts to neutralize threats, reduce vulnerabilities, and mitigate risks. ERM software systems usually include the following.
Dashboards
Risk management software dashboards are used to compile data, news, and alerts in a centralized, easy-to-digest format. These dashboards provide an eagle’s eye view of the most important news items and data points for your risk mitigation operations. A well-designed dashboard displays the insights you need in order to direct your efforts toward the area where they’re needed most. Dashboards can usually be customized too, allowing you to highlight the issues that matter the most to you at a given point in time. Risk management dashboards help you maintain and refine your focus.
News Feeds
News feeds keep stakeholders and business leaders informed on newly discovered threats, vulnerabilities, and changes in the world of regulatory compliance. The ever-evolving nature of cybercrime, industry-specific threats, and regulatory oversight makes risk management even more challenging. It’s like trying to hit a moving target. If you’re going to be effective in the realm of risk mitigation, then you need to be well informed. A news feed can help you to achieve this objective by centralizing the updates and news that are most important to your company and its risk management efforts.
Checklists
Checklists are an important tool when it comes to risk management and mitigation simply due to the complexity of the response. Risk mitigation can get very complex, with efforts spanning multiple departments and divisions. Dozens of individuals may be involved in a remediation effort. Stated simply, things can get very complicated very fast. A simple checklist can go a long way toward organizing your efforts to ensure that the risk, threat, or vulnerability is addressed fast and efficiently. Pre-made checklists can also be useful for guiding a company’s response to an issue, particularly in cases where the organization has never previously dealt with a specific type of challenge.
Project Tracking Tools
The best risk management platforms include project management-type capabilities where you can plan and monitor your company’s response to a risk factor, threat, or vulnerability. These platforms allow you to centralize your collaborations so everyone remains on the same wavelength and the remediation efforts stay on track from start to finish. Once an issue is identified, it can then be evaluated and a step-by-step action plan is developed. This is an area where you can integrate your checklists too. Risk management software platforms also allow you to assign tasks to an individual and all involved parties can post updates and collaborate within the project space. This tool set has all the features you need to identify and address risk management issues in a highly efficient manner. A well-organized response often proves to be the best response.
Integrations
Ideally, your risk management software system should be integrated with your other enterprise software systems and platforms. This allows data to flow freely between the systems, allowing you to take in all relevant information in a single, central location (such as a dashboard panel). Integrations promote a “big picture” approach to risk management — a strategy that has been found to be highly effective, especially when compared to an approach that takes a more narrow view.
Data Tools
A risk management platform should feature data management-related tools since these can be very useful to evaluating and responding to risks. Report generation and data visualization capabilities can play an important role in the risk mitigation process. The best decisions tend to be data-driven decisions and this is especially true when it comes to risk mitigation.
Many risk management software platforms include industry-specific modules with tools and features that are designed to accommodate the unique needs of a particular business type. For example, regulatory compliance represents a very real area of vulnerability for companies in highly-regulated industries such as the healthcare space and the financial sector. Therefore, these companies can usually benefit from the inclusion of a module that features a customizable dashboard and tools designed to evaluate and track regulatory compliance-related issues within the organization.
An increasing number of risk management software systems now include artificial intelligence and machine learning technology which can be used to make predictions and recommendations. For example, a platform may predict which risk factors or vulnerabilities may represent the greatest threat to a financial institution. These predictions and recommendations can be very accurate, especially if you can leverage large volumes of data to help formulate the prediction.
Bank Risk Mitigation With the Help of Software
Today’s banks and financial institutions confront serious threats and risk factors on a continual basis, but the right software tools will drive your risk mitigation efforts forward. You’ll have the data you need to make good decisions. You’ll have the tools you need to organize a strategic response to new emerging threats and pre-existing vulnerabilities. And you’ll have the news and updates you need to plan for the future.
These software systems allow a company to centralize its risk mitigation efforts, allowing for better organization and more effective collaboration. But there’s no one-size-fits-all solution in the world of enterprise software and this rings true for risk mitigation platforms. As such, many organizations can benefit from the development of a customized software solution. That is one of our specialties here at iTech, where we help clients to make the most of their data.
The innovators at iTech work with the client to gain a clear view of the organization, its operations, its goals for the future, its regulatory oversight challenges, and general business pain points. Then, we work to develop a digital transformation solution that aligns with the organization’s challenges and objectives. We invite you to reach out to the iTech team today. Let’s begin a dialogue on your risk management efforts so that we can begin the process of developing an innovative solution that will minimize risks and neutralize the threats that confront your financial institution.