Modernizing Compliance Risk Assessments
Making the case: Benefits of modernizing your compliance risk assessment
Benefits of modernizing your compliance risk assessment
As the financial services industry continues to evolve, Financial Institutions (FIs) are exposed to more risks than ever before. The changing regulatory landscape and FI‘s increasingly complex operational structures introduce new compliance risks that must be assessed and mitigated. Simultaneously, as regulators have increased their expectations for more robust risk frameworks, FIs must continue to evaluate whether they adequately capture and assess the risks their organization faces to align with regulatory expectations.
As organizations expand product and service offerings and incorporate new technologies into their operations, managing new and more complex compliance risks becomes increasingly challenging, resource-intensive, and more difficult to achieve the necessary level of risk mitigation.
Compliance risk assessments (CRAs) are a critical component of a risk management framework intended to help organizations capture and assess their risk exposure. However, many organizations use outdated methods to conduct their CRAs and often rely on manual processes and antiquated tools that have not kept pace with the expanded scale and complexity of their risk profiles. FIs have the opportunity to enhance and modernize their CRA process to control for and address these inefficiencies.
Revisiting the CRA framework and methodology
Effective CRA frameworks allow FIs to capture the appropriate compliance risk(s) posed by their products, processes, and services while aligning with their organizational goals. While framework architecture may differ among institutions, similar elements are typically deployed across complex FIs and risk management program maturity levels. Our POV provides insights on the practices to modernize CRA frameworks across each of these components.
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Modernizing Compliance Risk Assessments
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