Common Financial Control Management Challenges and How Custom IRM Solutions Can Help

Financial institutions such as banks and credit unions are faced with a complex and diverse risk management and mitigation landscape — one that is exceedingly difficult to manage. You have stringent legal and regulatory compliance requirements and complex security requirements, and you must do business in a way that allows you to maintain the public’s trust. 

A bank’s financial control management team is tasked with handling these and many other challenges. Fortunately, the right technology can streamline and simplify matters. Enter: integrated risk management or IRM software solutions. 

What are Custom IRM Solutions? 

Integrated risk management — also known as IRM — refers to a company’s practices, processes, and protocols, which are supported by a blend of technology and a “risk-aware business culture.”

As the name suggests, this strategy takes an organic, integrated, and holistic approach to risk management and mitigation. Gartner explains it as a methodology that leads to “improved decision-making and performance through an integrated view of how well an organization manages its unique set of risks.” 

Many may be more familiar with the term GRC software — also known as governance, risk, and compliance software. Some make no distinction between IRM and GRC software platforms. Others argue that GRC platforms are designed for a more reactive risk management strategy, whereas IRM software platforms are best suited to a more proactive approach to risk management. 

What Are Some of the Most Common Financial Control Management Challenges? And How Can IRM Solutions Help? 

IRM software solutions can be very useful for financial controllers who are tasked with identifying, stemming, and preventing losses within a bank, credit union, or other financial institution. Consider the following financial control management challenges and how IRM solutions can help. 

Automating Financial Controls – An integrated risk management software platform can include process automation that serves to simplify a variety of manual tasks. The five standard financial controls regions are cash flow, accounts payable, data security, human resources, and financial management. But financial controllers tend to have a hand in virtually every area of a bank’s operations. Financial controllers are faced with an ever-changing digital landscape. This constant evolution can complicate matters when it comes to risk mitigation and risk management. But by automating processes, a financial controller can maximize their reach and productivity.  

Financial Reporting and Anomaly Identification – A well-architected IRM solution will include reporting and auditing tools. Data can be pulled from a variety of sources through integrations. Then, those data points can be converted into data visualizations, charts, and graphs. In addition to data exports, users can also perform audits which are ideal for spotting anomalies and confirming data accuracy. Financial controllers can leverage these tools to identify financial reporting errors — issues that may signal a greater problem such as fraud or inadvertent human error. 

Budgeting and Cash Flow Management – A financial controller is often charged with top-level budgeting oversight and cash flow management. But cash flow management and budgeting at a bank is highly complex. Integrated risk management software can be quite useful, though, since you can pull in data from a variety of sources. IRM platforms centralize budgeting and cash flow data, creating a “big picture” that serves to simplify matters for financial controllers as they work to verify accuracy. In-built auditing tools also make it easier to ensure data accuracy. 

Budget Deviation Identification – Financial controllers are in a good position to identify deviations in budget expenditures. Overspending can easily go unnoticed, especially when you have multiple individuals involved and one individual may not be aware of how much another individual has spent. With the help of a custom-developed IRM software platform, financial controllers are in an ideal, centralized position to identify budget deviations such as overspending.  

Identifying Theft and Fraud – It goes without saying that financial institutions are prime targets for fraudsters and thieves. But lots of these crimes go unrealized because the evidence is only visible from a specific vantage point. The solution is a custom IRM platform, which can deliver a complete, centralized view of a financial institution’s risk management landscape. A well-developed data analytics platform can detect patterns and anomalies that may otherwise go unnoticed. This empowers financial controllers with the data they need to promptly identify theft, fraud, or human error.  

Financial Reporting Errors – Detailed and accurate financial reporting is extremely important for banks, lenders, and other financial institutions. Small errors can have a big impact. With data collected from a variety of sources, an IRM software platform allows you to generate highly detailed reports in real-time. In-built auditing tools allow for data verification. This is ideal for identifying errors due to improper data collection methods, reporting mishaps, and human error. 

Executing Action Plans – A custom IRM software platform may include project planning-type tools that allow you to map out a plan, assign tasks and collaborate on those tasks. This project planning feature is perfect for cases where you have multiple people involved in your financial institution’s risk mitigation efforts. By tracking progress, financial controllers can ensure that nothing falls through the cracks. 

Financial controllers stand to see the biggest benefit from the deployment of a custom integrated risk management solution. But there are countless other users within a financial institution who can leverage a custom IRM platform. A good developer will identify and work with the various user types within your organization. This will ensure that the platform will effectively accommodate the different users and their needs. 

Providing a Centralized View of a Bank’s Processes

An integrated risk management platform offers a uniquely centralized view of a bank’s operations and its financials. With data and metrics flowing in from all directions, this broad viewpoint makes it much easier to spot inefficiencies and flaws. Combine this with modern data analytics and you’re positioned to identify issues that may otherwise escape notice. 

Financial controllers play a major role in the development of processes, protocols, and policies within a bank, credit union, or other financial institution. Armed with the data, insights, and metrics from a custom IRM platform, a financial controller is perfectly positioned to make recommendations that serve to improve efficiency, reduce losses and increase profitability. 

Developing a Custom IRM Solution for Improved Financial Controls

Developing a custom integrated risk management software platform requires a collaborative approach, with the development team working directly with the financial institution and its staff. The developers must gain a solid understanding of the bank’s processes, priorities, and challenges. The IRM solution is then architected with these elements in mind. Integrations play an important role too, as data must flow from various databases and third-party platforms to the centralized risk management software platform. 

At iTech, we use a modular development strategy for our IRM software solutions. Each platform is built with a unique set of tools and functionalities — features that support the organization’s exact needs and requirements. We specialize in helping our clients to make the most of their data. We invite you to contact the iTech team today. Let’s begin a dialogue about your financial institution and its needs in an IRM solution.