Enterprise risk technology with the flexibility and agility to accommodate multiple and changeable processes are helping to address the current risk limitations among risk and compliance professionals.
- An independent study by Celent reveals some of the common risk weaknesses, such as being able to keep pace with regulatory changes.
- Solutions that work for a single, static risk are less successful when trying to accommodate multiple and changeable processes.
- Thomson Reuters Connected Risk is helping to address current risk limitations with an API allowing clients to link existing or new risk solutions.
In my previous post on the drivers of risk technology investment, I referenced a recently published report looking at the day-to-day challenges faced by risk professionals.
In particular, the independent study by research firm Celent highlighted some of the risk weaknesses associated with using previous generation risk technology solutions. Findings were presented at our recent London Summit.
As technology providers, it’s clearly imperative that we recognize these risk technology frustrations and seek to address them.
Common risk technology frustrations and issues encountered by those surveyed include:
- The expected reduction in regulation hasn’t materialized, which means compliance professionals need to streamline their multiple reporting requirements.
- At the same time, risk professionals are challenged to provide more timely insights on business exposures. Both groups acknowledge that collaboration would bring efficiency gains.
- These tasks are generally seen as an overhead and are perennially targeted for cost reduction.
- The digital world we live in means near-continuous business change. Risk and compliance disciplines are challenged to keep pace.
Addressing the risk challenges
While risk taxonomies are helpful in capturing known, inherent risks and providing standardized methods for checking risk mitigations, there are invariably streams of emerging risks that won’t fit neatly into these classifications.
Those surveyed also said it was often easier to use new and unique risk frameworks to address new regulations, and that the outputs will be more meaningful.
However, the trade-off is that it then becomes harder to aggregate group-wide compliance results.
There’s also a natural interest among respondents in using artificial intelligence to tackle challenges, but also a healthy skepticism as to how successful its application will be.
Flexibility and agility
When I consider the risk limitations encountered with previous generation risk technologies in meeting these needs, the common problems were flexibility and agility.
Whereas deploying solutions for a single, static risk or compliance discipline was relatively successful, the need to accommodate multiple and changeable processes much less so.
Siloed data is preventing organizations from gaining a holistic view of risk, while they also don’t have a singular reference point of data.
Connected Risk platform
Our Connected Risk platform was developed with these sorts of risk technology frustrations in mind.
Specifically, the Connected Risk platform employs ‘nodal mapping’ to aggregate risk and compliance taxonomies and data that needn’t comply with a common standard.
The in-built developer capability allows bespoke solutions to be developed to meet unique risk and compliance solutions.
We use this same capability to develop out-of-the-box productized solutions for the most common industry use cases.
Our API allows clients to link existing or new risk solutions, thereby permitting the use of specialist risk solutions that aggregate outputs. In so doing, it also serves as a gateway to AI and RegTech solutions that our clients wish to incorporate.
Examples of how these capabilities have been applied to specific use cases will be shared in future blog updates.