Digital technology has changed many aspects of our personal and working lives over the past decade. Yet there are certain elements of the business world that have remained relatively untouched by digital transformation – one of those is the risk management function.
For Financial Services (FS) firms especially, the regulatory compliance landscape has become more complex since the financial crisis of 2008 and a logical move would be for organisations to digitise risk management and / or an overarching GRC department. There’s also an increasing expectation from customers and partners that businesses will be fully digital.
There are many digital risk management tools and GRC software solutions available for users, yet there are still organisations out there making do with legacy systems that are lacking for modern risk and compliance management. What are the main challenges for organisations seeking to digitise risk management and how can those challenges be overcome?
Slow and outdated legacy systems
Digital transformation is a major undertaking for any organisation and needs to be applied across the business, not just to risk management functions. But it’s straightforward. A recent survey of 800 IT professionals by Mulesoft revealed that 64% of respondents said they find it difficult to introduce new technologies because of constraint with their existing IT infrastructures.
This is a situation that would be familiar to anyone seeking to digitise their risk management or GRC departments. If risk managers wanted to roll-out new GRC software or risk management solutions, then it’s common to be faced with legacy systems that are not integrated, meaning risk data is siloed.
Digitising risk and incorporating the framework into existing software can seem daunting, which is why it’s vital for the risk management tool to be integrated easily with other systems. Oxial’s sGRC solution is fully scalable and customisable, able to be tailored to suit specific needs, to integrate with existing systems and offer the appropriate functionality for that customer.
A lack of budget and resource
Risk management has traditionally been perceived as a reactive function, to be called upon only when needed. As the nature and severity of business risk has grown over the past decade, this has changed somewhat, and organisations are now more willing to invest in the right risk management tools to do the job effectively.
But budget constraints are still a factor when looking to digitise risk management. Squeezed margins and a need to also innovate and improve business performance is a common situation for many organisations. That’s why enterprise risk management software needs to be cost-effective, as well as deliver the required functionality.
A risk management tool such as Oxial’s provides the innovative approach and functionality to GRC and risk management, but within a price range that is realistic to their size. This makes it suitable not only for larger organisations but also for the mid-market firms for whom budget constraints are even stricter.
The culture is not risk-focused
An organisation could have the best risk management tool in the world, but if the culture is not right then that tool will not be nearly as effective. The nature of risk management has changed, with the function not attracting people who understand digital, analytics and broader business skills, while more of the business beyond the specific risk function is now accountable for risk and compliance.
Not every organisation has instilled this culture of responsibility within the business. This change management element of digital transformation is undoubtedly one of the most important. People need to be collectively more aware of risk and their own role in mitigating that risk.
A lack of leadership and vision
Much digital transformation has been more focused on customer engagement and interaction rather than back-end business functions such as risk. Business leaders can see the immediate value in such a focus and are more willing to invest and provide the strategy required to achieve those goals.
But digital transformation is not about looking at one department or specific function – it needs to encompass the entire business. This requires a strong framework in place with a culture that takes its direction from the top of the organisation and digital transformation must progress alongside the transformation and development of the entire business operation.
Setting this vision, that changes how a business operates, requires direction and leadership. When working with organisations seeking to digitise risk management, Oxial works closely alongside its customers to provide input into that direction, based on our experiences working with some of the biggest companies in the world.
Digital transformation of risk management is a growing requirement for most organisations and should really be tackled as part of an overall transformation strategy and policy. Oxial has the expertise and risk management tools to play an important role in this, so get in touch with one of our digital risk management experts if you think we could help you.
