While regulatory change management and enterprise change management may be different domains, there is a lot that regulatory change managers can learn from enterprise change management. The basics of both remain the same, even if regulatory change is a bit more complicated to manage.  

Identify the nature of change 

In addition to failures related to lack of support, 70% of change projects fail because they are not managed with an adapted approach. In other words, we often think that all change projects are the same and can be done in the same way, but that is far from the case. 

Indeed, each change must be treated in a personalized way according to its nature and the populations impacted, because, by definition, the change is frightening and creates frustration. The evolution of mentalities and behaviors is a complex task. Indeed, any change within an organization impacts the employees. Without involving them, and without knowing the levers to help them accept the change, it is very difficult to make this project a success.  

The same goes for regulatory changes. It is important to look at the human aspect of things and make sure that employees understand the changes required and why they are required. 

Build an action plan 

Given their complexity, it is common to encounter difficulties to support change projects. Unfortunately, the means used are often not / or not very effective because they do not manage change as a problem. Regularly, no action plan is put in place, scattered actions are launched throughout the project. 

This makes the involvement of stakeholders very difficult in the long term, especially in a context of change that is often experienced as a very important transformation of everyday life. You must build a plan, set goals, and of course evaluate the effectiveness of the actions as you go. 

Another key point to not miss out on its change: do not limit yourself to spreading information. We have seen on many projects a common misconception: if people know, they will automatically change. The information is necessary, but not enough. 

Accompaniment makes it possible to involve the targets, to mobilize them, by making them actors of the transformation. For example, for a tool change, a user technical documentation is sometimes considered as an accompanying support, even though it doesn’t provide much help. It is therefore more important to privilege, questions / answers sessions, workshops, communities ... More interactive media that allow people to express themselves, participate, co-build and project into a future that makes you want. 

Finally, a major element is the implementation of a personalized approach concerning the different stakeholders. This will result from a reliable stakeholder analysis that is precise enough to release the power of influence of each identified "population". The sponsor, for example, is the one who is convinced. He then carries the project throughout his life cycle and will have enough influence to get others to accept the future. Then you must be able to give the users a clear vision of what will change and not leave them in limbo. 

You cannot simply tell people about the regulatory changes that are coming up – you need to make sure they truly understand it by talking to them, providing training, and making sure you are there to answer any questions they may have. 

Make lasting changes to behaviors 

First and foremost, it was important to change the behavior of individuals, aware that their attitude is not, or no longer, the right one. For illustration, all employees understood it was essential to have a complex password, however this rule was applied very little.  

Businesses also need to make sure that they make lasting changes. This doesn’t simply mean that they should tell the employees to make lasting changes, but that businesses should look at the way they handle regulatory change management and look at where they can make improvements. Some businesses may opt to change the processes that guide RCM, while others may choose to invest in a regulatory change management solution. It is important to create some sort of permanent change to the organization. 

That is one of the biggest mistakes the management can make – focusing on short term change. It is easy to change the way people behave for a short period of time. You just need to increase scrutiny and remind everyone about the changes required and they will act differently. However, they will soon go back to working the way they have always worked, which is why it is important that we look at the way people behave and see how we can change their ways permanently. Maybe the answer is in providing them with the right tools, maybe we need to introduce better controls, or maybe management itself needs to take a more active role in the change management process. 

There is an app for everything these days. People used to joke about how there’s an app for everything except for falling in love, but you can’t even say that anymore. Risk management, like everything else in our lives, has similarly been completely transformed by technology. What used to be a simple process that was done through noting down some information on some papers is now a complex and sophisticated process.  

While we may have lost the simplicity of it all, we have gained much more. What used to be slow and cumbersome is now an efficient process that helps organizations achieve their goals. Enterprise risk management software is here to say, because its advantages outweigh any drawback you can think of. Let’s look at some of the advantages that have convinced businesses that risks should be managed through software solutions. 

Data gathering and analysis  

One of the biggest strengths of risk management software is being able to analyze data. Businesses no longer use paper to store important information, but the information is still fragmented. A bank will have many different documents, spreadsheets, as well as email threads with critical information. Gathering all this data in one place is a major undertaking but it is just the start. After all this data has been gathered it also needs to be standardized.  

Standardization is necessary because the data is present in different formatting, across many different file formats. There is critical information present in Word documents and Excel spreadsheets, and this information cannot be directly compared unless we take out the data and bring it onto one filesystem. The problem is deeper than just file types. Different departments may have their own formatting standards, which results in further complications. You cannot directly compare documents to documents or spreadsheets to spreadsheets either, because even within those documents and spreadsheets the information is being stored in widely different formats.  

Enterprise risk management completely changes the way risk related data and information is stored. Instead of having the data be dispersed across the organization in different documents and spreadsheets, all the data is stored in a centralized risk management platform. Since the data is being stored in the same place, it is also being stored in the same format. This means that there is no preparation or standardization required to compare the data or perform any type of analysis on it. 

This is why a lot of these ERM software solutions also support real-time analytics. Real-time analytics are impossible with manual risk management methods because the data needs to be prepared to be analyzed. Risk management apps eliminate this need. 

Increased visibility into risk 

Putting all the data in one place also enables another functionality – risk visibility. Not being able to see the risk that is affecting the different parts of organization and the efforts to mitigate those risks is a major problem for management. The risk manager and the board both want to ensure that the business is adequately mitigating risks, but they have no way to verify this information. They must rely on risk reports, which creates further problems. These risk reports are manually created from historical data. Since they are manually created, it takes a lot of time and effort to create these risk reports. After all the time and effort it takes, all risk managers get is a view into how risk management activities were carried out over the past few months. The lack of real-time risk visibility is a major reason that businesses are often blindsided by risks – they have no way to detect problems in risk management.  

Risk management software solutions have all the data in one central location, which allows other people to access the data in location as well. This means that the risk manager simply needs to login to the risk management platform to see how risks are being managed across the organization. If there is a risk that is increasing in severity, the risk manager will be able to see it on their dashboard. If there is a risk management activity that is not being carried out, the risk manager will be immediately detect it and get in touch with the people involved to find out why the activity is not being completed. The risk manager and the boardroom now have visibility into risks affecting the organization and the risk management activities and processes throughout the organization. Having visibility means having control. 

There are many other advantages as well, which is why risk management solutions are so popular in businesses these days. If your organization also wants to improve the way it handles risks, then you need to look at the available solutions. There are solutions aimed at small businesses and solutions aimed at large enterprises – you just need to make sure you pick the one that fits the needs and size of your organization. 

View the latest blog on Key Risk Indicators.

Change happens so slowly yet so suddenly. The way our lives have changed over the past few decades are testament to how fast things can change. We have technologically advanced more in the last 100 years than in any other 100 years in all recorded human history. Everything we do has changed, yet it is hard to pin down when the change occurred. We cannot really pinpoint the date when it became normal to shop for things over the internet instead of going to the store.  

The same is true for cellphones. Look at how worried we get if someone’s phone is off – we start thinking that the worst must have happened. Parents would be horrified if they couldn’t get in touch with their kids via their phones. It is crazy to think that just a generation ago there were no cellphones. When we went out of the house, that was it, there was no way for us to get in touch with anyone unless we went to another phone located somewhere. It used to be perfectly normal to not be able to get in touch with someone but at some point, it just became unfathomable. Slowly, yet suddenly.  

How audits have changed  

The most remarkable thing about information technology is how it has fundamentally changed almost everything we have, and that includes audits. Think of how audits used to be before we all had computers. All information was stored on papers, and the auditors had to balance the books and investigate written records to find the information they needed. Imagine how tough things would be today if the auditors had to bring out all the finances and manually add everything and double-check the calculations to make sure that all the numbers are correct. While it was perfectly normal a few decades ago, it has now become an unthinkably inefficient process. 

The most profound change is digital documentation. Every record is now digital. It makes things significantly easier for auditors. Back then, the auditors would either get all the records in huge boxes, and then they had to go through them manually. Sometimes there would be too many records to send via post, and the auditors would have to make a personal visit and stay on-site for a couple of days just so they would be able to get the information they need. Now, everything the auditors need is present in a server in digital form. They can access anything they want with a couple of clicks. If they don’t find something they need, they can send an email and get a reply within minutes. 

Digital documentation also has another benefit besides making everything easier to access – it also makes the information searchable. Instead of manually sifting through hundreds of thousands of pages looking for the information that they need, the auditors can now simply search on their computers and all the documents which have the information that is included in the search string will be right in front of them. As you can imagine, this feature helps auditors a lot, because matching information across documents and other records is a core part of everything they do. Now, if they want more information about something, they don’t need anyone’s help, they can just search for the information.  

The future of audits 

While audits have evolved remarkably, it must be kept in mind that this is only the beginning of their evolution. The most significant change will be caused by artificial intelligence. While today’s audit management systems can deliver functionality far beyond anything that was possible until a few years ago, they are still limited. Many audit management software solutions incorporate artificial intelligence and machine learning, but the reality is that a true artificial intelligence just doesn’t exist yet, and until it does, the current audit software solutions represent the nadir of audit technology. 

The biggest limitation of these solutions is that the do not understand audits. While they automate many audit processes and introduce streamlined workflows, they cannot read a document and understand what it means. That is something only an artificial intelligence can do. Once we develop the technology, auditing may become completely automated. Imagine how powerful an auditing artificial intelligence would be. It would be able to read every document the business has in just a few minutes and would be able to understand everything that is written down in the documents. 

It would then only need to spend a few minutes to analyze all the information and reveal any conflicts or errors in the information. Once we reach this technological era, there is no telling what the limits of the technology will be. A.I. will be able to build technology we cannot even imagine and introduce efficiency levels that simply weren’t possible before.  

Since the 2008 financial crisis, private banks have been confronted with a growing flow of regulatory requirements relating to customer identification, the fight against money laundering, the fight against the financing of terrorism, prevention of corruption, compliance with tax compliance, etc. In other words, regulators require banking institutions an ever-deeper knowledge of their customers (KYC). 

These compliance requirements impose a higher and higher cost on banks, not only because of the human and technical resources they require, but also because of the risk of sanctions (fines) and loss of reputation that they induce. This explosion of compliance costs is, according to many banking leaders, a source of disruption. 

In addition, compliance requirements vary widely from country to country. The cost is therefore even greater for private-sector banks that have customers in many countries and / or perform multiple cross-border operations. This particularly impacts the Swiss financial center, which is the world leader in cross-border wealth management. 

This increase and complexity of due diligence requirements also have an impact on customers because opening and managing an account requires them to provide more and more information and documentation, which tends to slow down these operations, this information must be carefully checked and validated. 

However, the development of new technologies applied to finance (fintech) seems to offer solutions to these problems. These technologies can enable banks to reduce compliance costs and risks, save time, and facilitate relationships with their customers.  

Thus appeared a new dynamic field of activity within fintech: that of Regtech (contraction of regulation and technology), covering all the technological tools used to facilitate compliance with regulatory requirements by stakeholders financial. Compliance management systems are just one example of Regtech solutions making a major difference in many industries. Compliance management solutions are now a common sight in the healthcare and financial sector. 

Using machine learning 

Among the tools used by Regtech, we can mention the development of artificial intelligence, including using machine learning, the development of software capable of processing natural language, the constitution of huge databases, algorithms in to extract, aggregate and analyze very large data sets (big data), data mining and the development of behavioral data analysis tools to detect weak signals of fraud, regulatory reporting tools, the creation of digital identities, the automated monitoring of regulatory data, biometrics, cryptography, blockchain (decentralized and highly secure digital database).

In other words, Fintech, in cooperation sometimes with banking players or service providers, has developed software tools and databases that can facilitate the due diligence operations that are imposed on banks. Some service companies offer databases (KYC utilities) to ensure better information sharing between financial institutions. These instruments, however, only cover a limited number of partners and their reliability is still widely debated. The authorities of Singapore have engaged, in close collaboration with the financial industry, to create a national database that will allow the accurate and secure identification of clients of financial institutions. Such moves can help businesses ensure better compliance, but there are some concerns related to privacy which may prevent us from using the same types of methods in other countries. Singapore is overall very heavily regulated, and we cannot be sure that other countries will appreciate a move to create a centralized database. 

Constraints and limits 

The various initiatives that rely on the Regtech are certainly promising because of the innovative nature of the techniques used. However, they are confronted with several constraints and limits. 

• To meet the KYC requirements imposed on them, banks can only rely on an electronic identification of their customers to the extent that the State to which they are subject has adopted the legal provisions setting out the conditions. recognition of digital identification. 
• In a globalized financial world, efficient use of digital identifiers and KYC utilities requires the creation of common and therefore shared databases. However, the sharing of customer information between banking players faces serious limitations due to the privacy and data protection rules that exist in most countries.  
• The creation of an entity common to the institutions of a financial center to support various undifferentiated administrative operations would certainly bring significant savings. It would, however, involve overcoming many obstacles (diversity of priorities of banking players and systems already in place, autonomy of each in terms of risk assessment, etc.), as evidenced by the recent debates in Switzerland around the idea of ​​a "superbank". 
• Regtech banks' use of new compliance technologies does not relieve banks of their responsibility for due diligence and the use of the data collected. It is ultimately up to the banks and alone to assume the risks that may be involved in using these technologies. 

Despite these constraints, Regtech solutions are expected to take an increasing role in the compliance activities of banks. In the future, they will certainly constitute an important element of competitiveness for the financial centers and for each of their members. 

How to automate risk control self assessment? Read here:   https://www.360factors.com/blog/enterprise-risk-management-and-automation-of-rcsa/

Managing regulatory change is a major headache for businesses operating in industries where the regulatory framework fluctuates. The problem is that the regulations define what the business can and cannot do, and when they change, the business must change how it operates. This makes it difficult to make long-term plans and strategies, because there is always a risk that the chosen strategy may no longer be viable if the regulatory framework fluctuates.  

If your business is stuck in a similar quagmire, there’s no reason to fret. Here are 3 steps that businesses can take to improve the management of regulatory change.  

1 – Create a risk map 

Creating a risk map is an essential part of regulatory change management which is often skipped by business, and they end up paying the price later. There are many links between regulations, policies, and business processes. There may be a policy which is directly related to a regulation. When you create a risk map you create a model of all the relationships between regulations and parts of your business. 

What is the point of this process? It makes it very easy to manage regulatory change. Normally, whenever there is a regulatory change, the business must do an audit of its policies and processes to determine what will be affected by the regulatory change. As you can imagine, this is not an easy or quick process, and there are chances that something might be missed. It is, however, an essential process. 

When a risk map exists, they don’t have to go through everything – they already know what regulations is linked to which policies and which processes. So, if regulation 31a changes, their risk map will tell them that policies 2b and 5c were dependent on regulation 31a. It will also tell the business about the business processes affected by policies 2b and 5c. This means that simply by knowing which regulation changed, management would know which polices and processes would be affected by the change. While making the risk map takes some time and effort in the beginning, it significantly reduces the time and effort required whenever any regulation changes. 

2 – Get more updates about regulations  

Most regulatory experts have to rely on their own research to determine how the regulatory framework is changing. While they do a great job, the process can be made much better. There are many services and trade magazines which focus on regulatory changes. There are software solutions that provide the latest regulatory news and updates as well. 

Subscribing to these tools is well worth the minor cost of such services. These services ensure that you get all the relevant regulatory news your organization needs to know. Instead of having to go out and find relevant information, the relevant information itself comes over to you. This saves a lot of time and effort and also provides more business intelligence than would be possible otherwise. There are standalone solutions which provide these updates and many regulatory change management solutions also have a similar service as an added feature. Make sure you ask about regulatory updates from the vendor of your regulatory change management solution. 

3 – Add automation to change management  

One of the most significant steps an organization can take is to implement a regulatory change management system. These solutions are designed to help organizations get updates about regulations and also implement the necessary changes. These solutions provide regulatory updates and also have a great risk map built in within them, which further reduces the time and effort required to manage regulatory changes.  

Small organization can survive with manual change management methods, but mid-sized to large enterprise need a better approach that streamlines the process. There are regulatory change management solutions available in all shapes and sizes. There are on-site solutions developed by legacy vendors that require millions of dollars to implement and maintain. These are usually only used in the largest multi-national organizations, because their cost is too high for any other type of business. 

Smaller businesses need not worry – they also have a wide variety of solutions to choose from. Smaller businesses should look at cloud solutions that have recently been released. These solutions have a significantly lower implementation cost and their maintenance is handled by the solution provider, which further simplifies the whole process. 

Businesses will always have to work with regulatory changes, because governments keep changing regulations as they see fit. It is important to include a bit of flexibility and change management in the long-term plans of the organization, and to make sure that there is a process to manage change. Regulatory change management is an on-going process which requires constant attention, and it is also necessary that there is a tool in place that makes the process easier for the regulatory experts within the organization.  

Audit management can be a messy business because audit managers do not have the right tools. Most audit managers must use general-purpose software like Excel and Word to accomplish the task, which further complicated the matter. There are many strategies which can be used to streamline the audit management process and it is important for all audit managers to be aware of these strategies and tools. 

Getting the right tools  

The biggest problem being faced by audit managers is that they do not have specialized tool. It is important to note that specialization is vital to increasing efficiency. Any activity that is not important or occurs infrequently can be done with general-purpose tools, but any activity that is repeated and is of vital importance needs specialized tools. We have all seen specialists use specialized tools to complete work that we could not have done without tools, and we aren’t talking about people with desk jobs only. When you call a plumber or a carpenter to fix something in your house, they show up with special tools which allow them to work more efficiently and accurately than would be otherwise possible. 

The same is true for almost every precision. A surgeon needs surgical knife to perform surgery accurately. A painter needs their paint brushes. Almost every profession has some tools which have been specially designed to accomplish the tasks included in their job role. The problem is that audit managers are being asked to manage audits but are not being provided any tools to work better and faster. 

The perils of general-purpose software  

Before we get into why it is such a bad idea to use general-purpose software applications and tools, let us be clear that the tools in question are not bad. Microsoft Excel is an excellent piece of software; it is used in almost every office in the world and its versatility is unquestionable. It is used to keep all sorts of records, and audit managers also use it to keep track of everything. However, it is important to note that this general-purpose software does not contain any tools specifically made for audit managers. 

While it is possible to manage audits with Microsoft Excel, just like it is possible to perform surgery with a very sharp kitchen knife, the performance simply cannot be compared to a proper specialized tool being used.  

This leads to several problems for the audit managers. Excel has no way of alerting the manager about upcoming audits. Most audit managers end up taking the data from Excel and put it on their Outlook calendar to ensure that they will get a reminder. This is also a problem – now we have two data points that should always correlate but there is no link between them. Someone may change the scheduling in the Excel file, which would make the Outlook reminders useless. Such problems are common in ad-hoc solutions that work on general purpose software. Important tools and features are impossible to replicate because the software application in question was never designed for the purpose it is being used for. 

The features you only find in audit management software solutions  

One of the most useful features for audit managers in audit management software is the audit calendar. The audit calendar is a calendar where, as the name suggests, a record of all audit dates is kept, but the functionality goes much deeper than that. The calendar also has notifications for when the audit is near, which ensures that the schedule is followed. More importantly, the calendar also allows audit managers to drill down into the audit get more information. If they see that an audit is scheduled, they can simply click on it to view more details. They can also go through the audit that have already been completed to view the results and follow up on corrective actions. 

All of this allows them to remove the administrative clutter from their job and instead focus on managing audits. Instead of having to spend hours on collecting information they can get right to work. This also creates an electronic audit trails which can be shown to external auditors to prove the organization’s dedication to compliance and ethics.  

Managing regulatory change has long been a headache for businesses in heavily regulated industries. Managing this change requires quite an investment. The business must hire regulatory experts who can interpret the regulations and tell the business how it will need to change itself to comply with the changes. The problem is that this process can be rather slow and is error prone because it is being handled manually. 

The Profound Nature of Regulatory Change   

Before we get into the perils of regulatory change, it is important to first understand just how much these regulatory movements can affect businesses. Imagine you are playing in a basketball tournament and your team is going quite well. One day the NBA representatives come to all the teams and say that they are making some rule changes. They say that they are making the quarters longer, are thinking of maybe making the ball smaller, oh and they may be eliminating point guards because they think point guards are having a negative effect on the sports.  

Imagine how much chaos this would cause. NBA teams spend years developing a squad and a strategy. They train their players for the full year where they play practice matches so that the strategy works flawlessly. Now the teams realize that their whole strategy will need to change. What is even worst is that the investment the teams made in acquiring and training the point guards will now be wasted. Longer quarters mean that players will get tired more often and are also at a higher risk of injuries, which can derail the whole tournament for many teams.  

This is hard to imagine because it is easy to see that the NBA would never make a move like this. Businesses, however, cannot be so sure. The NBA is trying to preserve the spirit of the game, and they can be slow with the changes to make sure all the team have enough time to change themselves and be ready for the new rules. The government, on the other hand, is trying to preserve the global economy. They cannot wait and let something damage the economy just to save a few businesses – they have the economy to worry about.  

This is a major problem in heavily regulated industries. Banks and other financial institutions must deal with such regulatory changes all the time. The regulatory changes may redefine eligibility for mortgages, may change the reserves a bank needs to keep, or may make some other change which is incompatible with the current strategy of the bank. The bank must then rethink strategies and then redo the financial modeling they were using to run their business. As you can imagine, this is not an easy process, which is why businesses take regulatory change management so seriously and invest heavily in it.  

How businesses manage change  

So how do businesses manage when there are regulatory changes? There are many steps which they take which allow them to anticipate the upcoming changes and prepare accordingly. Businesses hire regulatory experts who are dedicated to not just interpreting current regulations but also trying to see where the regulatory framework is moving towards. This is done by keeping a close watch on all the people joining the regulatory authority and going through their previous work.  

In the previous few years businesses have a new tool to help them manage regulatory change – regulatory change management software. These software solutions have many tools that automate parts of the process and streamline collaboration across the organization. This allows the regulatory experts to quickly extract the changes present in the new regulations. These solutions also make it easier to detect the domains of the business that will be affected by regulatory changes. Regulatory change management software introduces order into a chaotic process and reduces the amount of time it takes.  

Regulatory change management software was first used in the largest banks and financial institutions of the country. These software solutions were provided by legacy vendors and required an investment of millions of dollars. The implementation alone took months and was very expensive, but the large banks could afford to spend millions of dollars due to the sheer regulatory workload they had to deal with across the country.  

Things have changed now – new change management solutions are being aimed at mid to small sized banks and financial institutions. Most of these solutions operate in the cloud which significantly reduces implementation and maintenance costs. The best part of these solutions is the ease with which they can be procured while costing a fraction of legacy systems. Businesses can get a subscription to these cloud services and can pay for a year of usage, allowing them to accomplish in a hundred thousand dollars what would have required millions of dollars until only a few years ago.

Managing audits is tougher than one would think. While audits themselves are tough, managing them all throughout the organization can be even tougher. There are solutions which help make the process more efficient, but before we look at how to improve audits it is important that we understand the problems that plague audits. 

Obstacles to efficient audit management  

There are many obstacles and challenges which keep the process from being efficient. Some of the problems commonly faced by audit managers include: 

• Audits are resource intensive 

• Complicated process 
• Limited scope 
• No monitoring tools 
• Lack of collaboration  
• No follow-up tracking 

Audits are resource intensive 

Auditing is not easy. It takes a lot of resources to carry out an audit. The audit manager must make their choices very carefully – they must make sure that the audits that may prove to be the most beneficial are carried out. Audits don’t just require monetary investment – they are also disruptive, because the auditor needs collaboration with someone in the department. This means that while the audit is going on, it isn’t just using the time of the people who are doing the auditing, the department that is being audited must also provide people. If you consider the amount of time the departments spend to make sure everything is right before the audit this equation gets even worse.  

Complicated Process 

There is no escaping the fact that audits are a complicated process. Look at all that an auditor must do. First, they need to understand the scope of the audit. Once they understand the scope, they must understand the workflow of the department they are auditing. After that they need to request all the documentation they need for their audits and remember that the person sending them documents will also need some time to compile all the information required. All this severely complicates the whole process and removes the ability of the audit manager to control the process. The audit manager can control the efficiency of their department’s employees, but they cannot make people from other departments work faster.  

Limited Scope 

Since audits take a lot of resources and are very complicated to carry out, the audit manager must limit their scopes. It is easier to complete an audit with limited resources if only the essential areas of the business are audited. While this may be useful from an efficiency standpoint, it can end up becoming a major problem for the business. Limiting the scope of the audit leaves more vulnerabilities, as there may be problems the management will never be aware of because their audits don’t cover the domain in which the problems occur.

No monitoring tools  

An audit manager is responsible for making sure that all the steps of the audit process are being followed on time, but they have no way to confirm this information. They must manually get in touch with everyone to get updates, otherwise they would be in the dark. This is a major problem, which is why almost all audit management software solutions come with a method to track all audit related activities. How can we expect audit managers to track everything if they cannot even see what is going on in the organization?  

Lack of collaboration  

There’s an unfortunate perspective common among employees that auditors are to be treated as the enemy. People think auditors are trying to get them into trouble by finding faults in their work, which results in an adversarial reaction, which makes managing audits much harder. Audit managers need the collaboration of the whole organization to be able to efficiently carry out audits, but they seldom get it. 

No follow-up tracking  

The audit process does not end once the audit has been completed. The whole point of the audit was to find faults, based on which corrective actions are recommended. The audit will be considered useless unless the corrective actions are implemented, but audit managers often have no way to track the progress made on CAPA. They must manually get updates from different departments, which makes it harder to track problems and their resolution status. 

The Solution  

Businesses need to make sure that the other departments are treating the audit department in a friendly manner and cooperating with them in every way. An audit management system can also really do wonders for the organization. Audit software tools codify the audit process which makes it easier for everyone to follow it and see the progress that has been made so far. It also allows businesses to easily track and monitor all audits, which makes the job of audit manager easier. These solutions are a common sight in industries where audits are commonplace such as finance and healthcare and are slowly making inroads into other corporate offices as well due to their usefulness.  

Enterprise risk management isn’t something a lot of us think about. It isn’t really a glamorized job role or department, which is why most people do not know how essential it is for businesses. If a risk management department does its job well the business operates smoothly, without facing any bumps. However, if a risk management department fails to do its job it has severe consequences for the business and can even result in the business shutting down. This means that most people only hear about risk management if there is something wrong, which is why the value of it isn’t visible to most people. 

What happens when businesses do not manage risks properly? 

Risk management is the process of identifying, predicting, and mitigating risks. Let’s see what happens if any of these important tasks are not done properly. 

What happens when businesses fail to identify risks  

Identifying risks is the process of detecting all the risks that affect the business. Think of risks as the potholes on a road. If the pothole is small your vehicle will travel over it with just a small bump. If the pothole is huge it can take your whole car down with it. Think of running a business as driving on such a road.  

If you have identified all the potholes, you know all the risk that lay on your organization’s path. You know where the worst potholes are, and you make sure that you change lanes when the pothole arrives, so your vehicle isn’t destroyed. You also know which potholes are so shallow that they will not affect your vehicle at all, and you just drive over them without stopping. Now think what will happen if you did not know about the potholes.  

The obvious issue is that there is a chance you will drive straight into a pothole that is so deep that it will damage your vehicle and you will not be able to drive it. This is why it is important for businesses to identify risks as well as their severity. Businesses can only avoid risks big enough to tank the business if they know where the big potholes are. The less obvious issue is that you will be needlessly stopping at the shallow potholes, not knowing that you could have driven over it. This also happens with businesses – they become overly cautious, letting go of great opportunities, because they do not know that the risk is so small that it will barely affect the business. 

What happens when businesses fail to predict risks  

Businesses don’t just need to know about the risks which are affecting the organization right now – they also need to know about the risks which will be affecting the business in the future. Most businesses are following a long-term strategy towards growth. This means that most business have, at the very least, the whole year planned out. This is important because large enterprises are not agile – it is important to choose the right path for the business and stick to it, because pivoting to another path takes a lot of time and resources.  

When businesses fail to identify risks, they end up investing heavily in strategies which end up being useless. There are lots of examples of businesses not understanding the risks they were truly under. Kodak never realized that digital cameras would end up destroying its photographic film business, even though the indicators were all there. It is important to look at the way markets are moving to get an idea of the risks a business will face in the future.  

What happens when businesses fail to mitigate risks  

Simply identifying current and predicting future risks isn’t enough – the business also needs to take measures that help it mitigate a business. If a business fails to mitigate the risk, it may have as well as never bothered to identify the risk in the first place. There are many strategies for risk mitigation. Businesses can make sure that they have a backup plan for business continuity if a risk is actualized. Businesses can also opt to not pursue an opportunity which may expose it to a large degree of risk. 

Enterprises need to do all they can if they want to succeed in the face of risks. This is why enterprise risk management software is becoming an increasingly common sight in officers. ERM software can help identify, predict, and mitigate risks with higher efficiency, which gives business more insights about its future operating environment. Risk management software is now available for businesses of all sized and can even be accessed via the cloud, which makes it easy to use for any business across the globe. Some of the most successful businesses in the world got to where they are today because they focused more on risk management which allowed them to avoid the obstacles which their competition faced.  

We are living in times of change. The advent of information technology led the whole world around us to change, and artificial intelligence is now promising to bring even more profound changes. We are not near fully working artificial intelligence right now however we are making some very interesting progress in its direction. We may not have an artificial intelligence, but we have started successfully developing the pieces of technology which will be the prerequisites of artificial intelligence. We can expect these technologies to completely change the way we manage regulatory changes.

The problems with manual regulatory change management

Before we get into the changes that will occur in the future, let us look at where we stand right now and the problems we face. Currently most businesses are handling change management manually. Small businesses have a couple of people dedicated to regulatory change management, while larger organizations may have entire departments dedicated to regulatory change management. These people keep a close watch on all regulatory updates and news coming their way.

There is a lot of work to be done. These people don’t just wait for the upcoming regulations, they try to anticipate the coming changes. They look at the attitude of the government. If anyone new is being hired to lead the local regulatory agency these people will look into the previous records of the new person to try to predict the type of regulatory changes they may want.

Anticipating regulatory changes is important because a change in regulations can have profound effect on businesses. The regulations may make a business process illegal because the process is harming the economy – in such a situation the business will have to amend all future business processes and also all marketing plans to ensure that they do not commit to something that will not be possible in the future.

The process of going through the regulatory changes is itself a major pain. Not only do the regulatory experts have to manually comb through the changes, they must also then manually determine every area of the business affected by the regulatory changes. They must go through all the policies and documents to ensure that there are no violations as per the new regulations. This whole process takes a considerable amount of people and time, which means it ends up costing businesses a lot.

The technology available now

As we said before, we may not have artificial intelligence, but we do have many technologies that can be considered its prerequisites. Regulatory change management software uses machine learning and natural language processing to make the whole process streamlined. There is no need to manually sift through regulations; the software can automatically detect what has changed and highlight all the changes to the regulatory experts.

That’s not all – regulatory change management software also has risk maps in them. These risk maps define what process is linked to which policy and regulation. This proves to be of immense benefit when a regulation is changed. The risk map helps the software understand how everything is linked. So if the software detects a regulatory change, it can also see what parts of the business will be affected by the regulatory changes. This makes the whole process, from detecting changes to implementing the required changes, much faster.

Where we are headed

We can never be a hundred percent sure about the future because there are multiple paths which can be taken, and we don’t really know which one will end up becoming reality. There is talk of creating regulations in machine language so that computers can easily understand them. However, at the same time, natural language processing technology is also getting better, which means that soon there may not be a need of creating laws in machine language as the software will be able to understand the regulations as they are written right now.

We will not be surprised if the governance and administration part of the business is fully automated in a few years. We will still need people to supervise everything, but the computers will be able to do a much better job of monitoring everything and ensuring that there are no problems throughout the organization. It is possible for a human being to forget an important requirement which can result in a compliance violation, but it isn’t really possible for computers to forget any step. This will result in processes getting automated across the organization.

We are sure that we will look back on current times and find it funny how backwards we were, because some of the technologies on the horizon have profound potential to advance not just businesses but the whole society. Even regulatory bodies are now focusing on technology that will help them audit businesses easily and automatically detect problems.

Although compliance with criminal regulations is one of the functions carried out by compliance management, it is not the only one. Keep in mind that criminal compliance is only one of the parties associated with this figure, but it should be noted that its function goes beyond. The objective of compliance management figure is that an organization fulfils all its obligations, in short, it is an effective management system for companies. But for this to be so, it is necessary that a culture or business ethic of compliance be introduced, without which this mechanism would be meaningless. 

To establish such a culture, companies have a mechanism such as Compliance management that allows the effective management of their objectives, being able to reach them in a respectful way with the organization itself, with third parties and with society. 

For this, it will be necessary to integrate it into all the management processes of the companies, through policies and procedures that allow its integration in all areas of the company, from finance, to risks, through quality, environment, health and safety, etc. 

Having the safeguard of the company's Senior Management, you can overcome cultural, economic and labour conflicts, which are usually a turning point for the application of this figure. 

Objective of Compliance Management 

Its main purpose is to achieve the objectives that the company has established in a manner that respects the external and internal standards established by and for society. Regardless of the qualification or name that these norms or procedures receive, not everything is limited to the criminal sphere. 

To achieve all this the most important work carried out by the compliance manager is to create a culture of compliance, usually through codes of conduct or ethical codes. 

The Compliance function with respect to business ethics, is to establish a regulatory framework that incorporates the values ​​that society must respect, according to socially accepted and valid criteria, such as Integrity, honesty, transparency and good faith, ensuring that it is carried out and establishing sanctions when ignored. 

We could say that establishing a culture of compliance is the necessary starting point for a company, regardless of its size or activity, to fulfil its compliance duties. 

It will be necessary to establish a close connection between the different areas of society and relations with third parties so that compliance is effective, there is no doubt. But it is from this culture of compliance, when all members of society and anyone who relates to it, accept the need to establish due diligence in the development of their activities to meet all the requirements that are applicable. 

Compliance system in society 

Understanding this system, which is not a trivial matter, the integration of a Compliance system into an organization will be easier, since all will act in accordance with this culture, reducing the risks to which the organization can be exposed. 

Extending as ramifications to all aspects of organization that are the responsibility of the Compliance manager, making it possible for compliance to be a daily task within the different functions they carry out. 

As a result, it will lead to the elaboration, adaptation and execution of an organization and management model that includes surveillance and control measures suitable to prevent crimes, as well as to prevent any type of non-compliance other than criminal and affects the company. 

In summary, we could say that, a Compliance system is the precise gear for a company to act in accordance with the pre-established norms and criteria that apply to it in its different areas of action, taking into account any risk of non-compliance, facing it and overcoming it. All this with the goal of achieving the goals set by the company, ensuring its long-term continuity. 

Lacking an appropriate and suitable compliance system, a company could carry out its functions in a correct way. But in the face of any type of conflict or problem, the safest thing is to drift in an ocean of risks, without knowing or finding a solution and routing it inexorably to the wreck. 

In short, compliance management is an essential function in all types of organizations and using an automated compliance management solution helps ensure that the organization fulfills all of its legal and regulatory requirements.  

Enterprise Risk Management is a major part of risk management framework which organizes, plans, controls and leads the functions of an organization in order to reduces the possible risks that may affect the organization. Many organizations claim that they find ERM easy and implements it in the easiest way but it’s not the actual story. It requires a rare combination of organizational hierarchy and strong executive management. The most explicit concerns that generally a company faces are normally not related to the industry, geography or regulations. By analyzing common ERM challenges, management would be able to better develop and revamp their own enterprise risk management programs.

Risk Consistently

Risk may vary from vendor to vendor and department to department. What your vendor management department thinks of risk might not be a risk for and IT department. One of the biggest challenges would be maintaining a consistent and commonly applied risk terminologies. The most challenging thing that would come across anything would be defining risk itself. It is to ensure that each risk must be consistent and backed by correct instructions along with the clear guidance of laws and regulations that defines risk is supported by the regulatory directions.

Qualitative and Quantitative Metrics

Metrics like qualitative and quantitative arrive as challenge when it comes to assessing enterprise risk management. Qualitative method generalizes risk indicators instead of being specific to risk scores and they are less preferred. Whereas, quantitative method helps in quantifying risks which are in highest priority in order to focus on the probability in achieving set objectives and overall cost and this method of assessing enterprise risk management is highly preferred.

Managing Risk throughout the Department

So, here we know the enterprise risk management can help us in evaluating and identifying company’s risk, but story is not limited to it. ERM software helps organization to be able to report and visualize that how, where and what kind to risk to be shared with management, regulators, auditors and board of directors and with the help of ERM software these things are not to done manually but all is done through automated system.

Risk Reporting

Challenge that originations usually faces is while reporting two kinds of risks which are what kind or information should be discussed with internal and external management or vendors and how it should be communicated. Handling external risks are not that difficult since external management or public is limited to share certain information only. For example, financial statements, annual meetings, public presentations, quarterly announcement etc. Whereas how risk should be communicated is concerned, it is preferred to be done through board/audit committee, line management meetings and reports which are typically generate through risk database, taxonomy etc.

Time Constraint

The time constraint of ERM risk assessment is mainly dependent upon the willingness of an organization that how it is willing to invest in risk management. For the solution to this challenge, are preferably willing to shift from short term risk assessment to a longer term or a hybrid solution.

Most people do not understand why organizations need dedicated erm software solutions to manage enterprise risk, but that is only because most people do not understand how vital enterprise risk management can be. Managing risks is simple in our personal lives and for small businesses, because only a few risks need to be worried about. There is no need to quantify and assess these risks, because it is easy to keep track of them all due to their low quantity and small size. However, when we start looking at bigger organizations the picture completely changes.

The importance of knowing risks for businesses

If you want to understand why enterprise risk management is so important an analogy will help. Think of a small business as a small boat. If you take out a small boat, there are many risks you need to worry about. You know your boat can easily capsize and you need to stick to low currents to stay safe. Now, compare it to a large business, which is basically a large ship. The large ship can withstand a lot more turbulence and will not capsize. In a way it can be said that the big ship has more protections than a small boat.

However, when you look at the actual function of both boats it becomes abundantly clear that the big ship carries higher risks. On a small boat it is going to be just you and a few more people. If you are in a small boat, you will not use it for long trips which can result in you being adrift at sea. The same is true for small businesses as well. While small businesses are vulnerable, they are not very high risk because of their limited size. The risks they face are clear and immediate – they need to worry about the weather, the motor powering the boat, and they need to carry a few floats to make sure they will be safe if the boat capsizes or faces any other issue.

Now, look at the risks which a big ship must manage. These ships have hundreds of employees managing everything. There are multiple engines and countless other pieces of machinery which are running the ship – all of them need to be maintained. There needs to be an evacuation route for emergencies for people working below the deck. There is an immense amount of fuel and other perishable goods on the ship that need to be protected. While the ship can withstand a lot more pressure than a small boat, a problem in a big ship can also be a lot more catastrophic than anything that can happen to a small boat.

Enterprise risks are complex

This is why ERM software is needed. The captain of the small boat does not need to keep track of a lot of things. They can do everything they need to do without the use of any specialized tools. They can manually look into every problem and assess all the inventory before every trip. The same is simply not possible for someone who is the captain of a big ship. There are too many things to keep track of – there is simply no way for the captain to be able to run the ship without the use of dedicated tools. They have multiple people whose sole purpose is to monitor everything. They have screens giving them data about every piece of machinery on the ship. They have sensors telling them about the external and internal environment of the ship. They have communication tools that get external data regarding weather and currents to help them chart the right course for the ship. All of this is necessary, because there are simply too many things to manage manually.

This is what risk management software does for large organizations. It gives them all the information they need in a single centralized location, so the board knows what is going on within the organization. Without such a software it is possible that they may lose track of the risk related problems within the organization or they may be blindsided by an issue they should have been tracking.

ERM software is now a common sight in all large organizations. Some smaller businesses have also started using these solutions. While it may not be essential for smaller organizations, there are now many inexpensive ERM solutions available in the market which are easily affordable for small businesses. Small business owners are thus utilizing these solutions at a low cost to gain access to technology which was previously only available to large organizations because it cost millions of dollars.

Auditing is an essential part of most organizations, yet it can be incredibly inefficient. Businesses conduct audits because they need audits to find out about problems within their own organization. The question we have now is – can we improve the problems that plague auditing? Is audit management software the answer? Let’s take a look at the role of internal audits and the problems that businesses face in auditing. 

The role of internal audits 

Here is something we all need to understand – no business wants something to go, but all of them accept that something will go wrong. No one can run an organization which has thousands of employees spread across many different branches and expect each and every employee action to be 100% perfect. There are bound to be some human errors. This is why, no matter how much businesses hate mistakes, they accept that there will be a few mistakes. Now, finding out these mistakes is important for businesses for several reasons. 

Businesses do not perform audits simply because they are good natured – even unethical businesses have internal audits. That’s because there is another major reason businesses focus on internal audits – so they can avoid problems in external audits. This is a major cause for concern for businesses operating in heavily regulated industries like the financial sector, the energy sector, and the healthcare sector. These sectors also know that mistakes will happen. Just look at medical malpractice – hospitals know that doctors are humans too, and they may make some mistakes, which may even end up costing some lives. However, from a business point of view, making a mistake is not the biggest issue for businesses. The mistake being caught by an external auditor is the biggest issue. 

How internal audits can save businesses  

We simply need to look at how things work in the financial sector to understand the importance of internal audits. Let’s say that a bank employee partners up with a criminal and tells them that they will help the criminal launder money across borders. Now, realistically speaking, there is no way for management to stop something like this from happening. They cannot read the minds of the people they interview; they cannot predict who may end up working with criminals, and they cannot predict the future.  

Here is how it usually goes – there is a quarterly audit. In most cases, these transactions on the criminal’s accounts will be highlighted during the audit, which will result in an in-depth investigation after which corrective actions will be taken. The breach of banking laws will be reported to regulatory authorities, who will probably levy a small fine on the bank or maybe let them off with a warning. 

The scenario works very differently if the internal audit does not catch the fraudulent transactions. If the mistake is caught by an external auditor, it will result in heavy financial penalties for the business and they may even suspend operations temporarily to ensure everything is working correctly. This is the nightmare of every business in the financial sector.  

Internal audits are controls  

Who would the regulatory bodies levy heavy penalties on the bank if they do not catch it? Simple – the regulatory bodies also understand that management isn’t clairvoyant. They cannot ensure that every person that works in the bank works within the boundaries of ethics and laws. However, if the internal audit catches these transactions, it means that the bank has the right controls (safeguards) in place. The fact that the bank itself caught the fraudulent transactions and took corrective actions shows the regulatory bodies that the management of the bank is committed to following the law. 

However, if the internal audit misses the fraudulent transactions, the regulatory bodies think that management is inept. They are concerned that similar incidents will also occur in the future because the bank does not have the right controls in place. They will then do further audits to find out where the bank went wrong. In extreme cases the regulatory bodies may even take control of the bank away from current management. 

This is one of the reasons audit management software is becoming a common sight in businesses. Paying a small fee for some audit software is much better than paying millions of dollars to regulatory bodies in the form of penalties. Internal audit software solutions are also very inexpensive nowadays. A major advantage of audit software is that it creates an electronic audit trail of every action taken, which makes it easier for regulatory bodies to see how the audit system functions and assures the regulatory bodies that the bank in question has the appropriate safeguards in place. 

We can see a lot of benefits from GRC in a world of businesses. Most of the organizations in today’s world are being seen transforming their systems to GRC and those who are already having GRC tools implemented into their organizations are upgrading their systems to the most modern and latest ones. We have seen immense benefits from GRC solutions in managing risk, audit, compliance, documentation, change management etc. We are also very sure the solution that were having a decade ago, were different from the ones that we are having at the moment and at the same time we are also very confident that the solution that would be after a decade would be completely changed than the one now. So, it is always better to get yourself prepared from future circumstance that is also called risk management which is also a prime part of GRC.

When we talk about future, we can never be certain about it but yes we can always predict it and when it comes to GRC, which itself a too broad term to talk about and which is always changing, so even at management level it becomes quite difficult to predict about it. As it is relying with technology, so experts need to be more than certain to talk about the future of GRC. But when you categorize GRC into technology, regulation and government policies, then it becomes quite easy for the management to see where GRC would stand and how it would look in next 10 years.

Evaluating the Demographic Changes in Coming Years

It’s a very important in predicting the future of GRC which is having its own significance. According to a latest survey, the people who are already responsible for GRC management taking care of it skillfully will be over 60 or 70, which is almost a retirement age when efficiency and energy of a person does not remain the same as it is now. The ones which we left with would be millennials, who would rather be efficient or into the interest of it. It’s a prediction from experts that we may see the shortage of labor for taking care of whole GRC system. In the world of business, demographic plays a significant role like breathing in the air where we all share the same environment and when there’s shortage of it, you need to require more effort.

Tech – Enabled GRC Program

Since it’s already a world of modernization and digitalization but imagine seeing yourself in next 10 years that where it would be standing then. For example, imagine telling your boss that there’s no need to hire new employee or extra staff since you can do work of two or three and why wasting time, money and energy on some extra employees when you’re capable of doing work of extra people. The whole point of discussing this is that GRC system will become so compliant and efficient enough that it either won’t be needing extra human power or extra working hours, it would get compliant enough to manage it by its own self. The technology will get so powerful, intelligent and smart to even predict the coming risk and even get solution to secure business from it smartly and efficiently.

Smart Performance in all the Domains

When GRC is implemented in an organization than it takes care of every individual department that is being connected with the organization and it delivers intelligence across all the areas attached to the company. For Human Resource, it helps in changing and managing regulations, policies, geopolitical relations and else. It helps in dictating strategies right from hiring till implementation of organization’s framework. For Supply Chai, it helps in shifting economic and political conditions which can negatively influence market. Product Development is being helped for combining of accelerating technological changes and their unknown influences that can seriously threat risk management in product development. IT, the most significant department of any organization specially when speak off GRC. Cyber-attacks have the potential to threat and violate any company’s policies and data. IT makes sure that the GRC has been implemented in its best way so that whole organization is benefitted by it.

Most people fear the word audit- because most of them don’t work in auditing. When we hear that audits are going on in our company, we know that the auditors will be checking everything to make sure things are being done right. We are afraid that they may find a mistake we made and then we will get in trouble because of it. While auditing may seem like a scary process to go through, it is an essential process. Audits allow management to discover key areas of concern and highlight any vulnerabilities the business may have. Yes, they catch our mistakes and highlight them, but that is just because that helps the business perform better in the future. Audit management can be made efficient by using a good audit management software. 

The goal of audits  

Many businesses carry out audits when there is an unexplained problem they need to understand. Many other businesses perform audits because they are required to do so legally. Businesses operating in the healthcare industry and the financial industry, like all other heavily regulated industries, must hold periodic audits and share their findings with regulatory bodies to ensure that everything is being handled the right way. The goal of internal audits is to ensure that if there are any problems they are detected by the organization and handles before a regulatory body detects them, because if a regulatory body detects issues it will penalize the business through monetary fines and may even put some operational restrictions on them. 

Audits also help management understand what they are doing the wrong way. Often the business seems to have the right strategy but cannot get the results that it needs. This means that there is a problem in the business process somewhere along the way. In large organizations the process may include hundreds of people from different departments, so it is not always easy to determine where the problem occurred. Thus, audits are performed which are in-depth investigations into the records and data to determine what went wrong. 

It is important to note that punishing the party that made the mistake is never the aim of these incidents, unless the incident was intentional such as fraud or other criminal activities. The biggest reason audits happen is that they tell the organization where they are vulnerable. Organizations don’t just want to detect issues; they also want to know why the issue was allowed to occur. This happens even if there is a criminal activity. If someone steals data, property, or money from a business, the business doesn’t just want to know who did it – they also want to know how it was done. Knowing how it was done is important because it allows the business to eliminate the vulnerabilities which allowed the incident to occur in the first place.  

The outcome of audits 

Audit management isn’t simply about performing audits – it is also important to take corrective actions. Auditors don’t just tell the business what is wrong – they also propose ideas which will help eliminate the failures in the future. This is the desired outcome for audits – corrective actions which make the company safer and stronger. This is also why audit management is important – simply performing the audit isn’t enough. Management also has to ensure that the corrective actions recommended by the auditors are actually being taken. 

There will often be audits a few months after the first audit, the second audit will simply focus on the findings of the first audit and look at whether the problem has been solved. If not, then the auditors will recommend further corrective actions. 

Auditing can be exciting work, but it involves going though a lot of documentation. That is why businesses have started to focus on audit streamlining and automation. Automation carries many benefits for audits. It allows auditors to work faster and in a more streamlined fashion. It also makes it easier for the whole organization to collaborate for the audit and deliver better results. 

Almost every business in the country is bound by regulations. There are regulations that govern the way a business can treat its employees, the way it can operate in its environment, and so on. Different industries have varying amounts of regulation. There are industries where regulation is minimal, and businesses are generally not worried about regulatory bodies breathing down their neck. Then there are industries where everything is governed by regulations – where there are so many regulations that businesses and their processes must be designed according to these regulations. These businesses need to worry about the actions of the regulatory bodies and regulatory changes a lot.

Why are some industries regulated more than others?

A simple way of understanding why some industries are heavily regulated while others aren’t is to look at the impact the industry has on the rest of the country and society. Businesses that are self-contained tend to not be heavily regulated. Governments do not have to worry what the computer repair shop down the street is doing, because even if they do something wrong the damage will be limited to a few of its customers. Becoming a tutor is also easy – there are almost no regulations, because, again, even if the tutor does a bad job the damage will be limited to a few individuals and even to them the damage will not be too much.

However, there are industries where a mistake can be catastrophic, and that is what governments worry about the most. The healthcare industry is a good example. Doctors, nurses, hospitals, administrators – every single person involved in the healthcare sector, even the pharmaceutical representative, are subject to heavy regulations. They must do things according to regulations or their licenses to operate in the industry can be revoked. The reason behind it is simple – a mistake in the healthcare industry can cost people their lives.

The energy sector is another good example. Energy is of vital importance to society and mistakes in generating energy can be catastrophic. Oil and gas companies can end up polluting the ocean and lands. Nuclear power is also heavily regulated, because a mistake in a nuclear power generating plan can be potentially catastrophic.

Why the financial sector is so heavily regulated

When you look at the industries that are heavily regulated by the government, you will notice that most of them can generate a lot of harm if something goes wrong. Then you see that the financial sector is also included in the list of the most heavily regulated industries. This may seem like an odd fit in the beginning – the financial sector cannot blow up to kill people and pollute the land, it cannot kill someone through malpractice, it cannot result in a nuclear reaction, so why regulate it so heavily?

The simple answer is that the financial industry may be the most important industry out of all these when it comes to having the capability to damage the rest of the economy. We saw this in the financial crisis in 2008. Due to the bad practices of a limited number of banks, the whole economy was at risk. People lost their retirement funds. Multiple businesses faced bankruptcy. The effects were not limited to the USA either, even though the problems originated there. The whole world reeled from the effects.

The simple reason behind this is that the financial industry is the backbone of the global economy. Every business that is traded, every payment received, every loan acquired for expansion, every international transfer – everything is handled through the financial sector. While the financial sector itself might not seem to add a lot of value to everyone’s lived, but it powers the whole economy and enables it to function and grow. That is also why there are so many regulatory changes in the financial sector – governments know that a problem in this sector can be catastrophic, thus they try to course correct as often as they can.

Why businesses need regulatory change management software

Now – we all know that regulations are written in legalese and published by regulatory bodies, which does not seem like something that a software application could help with. However, regulatory change management software can play a vital role in heavily regulated industries, and is a common sight in banks, hospital, energy companies, and other heavily regulated businesses. This software allows businesses to ensure that they are complying with the laws and regulations that govern them.

This software can automatically detect changes in regulations – often time there are only small changes among hundreds of pages. If risks are mapped in the software, then the software can even tell you what you need to change in your business to comply with upcoming regulations. These features enable businesses to comply with new regulations quickly and painlessly.

See also: Becoming an organization that embraces regulatory change

Becoming an Organization That Embraces Regulatory Change

Implementing a risk management process into an organization is important role for any organization. For having a successful risk management framework, you don’t need to be substantial to be effective, but it just needs to investment of time, money and energy. Good risk management doesn’t have to be effective resourceful, but it needs to have good synchronization and bonding with other departments, formalization and structured to be successful and rewarding risk management for an organization. The organization need to have a clear and strong communications across the departments. The risk management team is responsible to explain that why there’s a need for a change in their management model. Going automated from manual is a need of time. The effective model will help in adjusting better image in an organization itself and out of the organization as well.

A good risk management system should be used for managing risk instead of doing it manually. When you are supposed to assess risk to predict future you have make sure that the information that you are putting is authentic and worth it so that you can have clear idea what would are the possible risks and what would be possible solutions to it. By going automatic, company can also go on ease that all you need to do is to have one-time investment and then you and your company are good to go for risk management and then your company will be in safer hands as well.

Effective Enterprise Risk Management

Risk assessment is a process which every business can do, and it is used for tracking the risks normally. Whereas, enterprise risk management is a process which every company ‘should do’ to evaluate the overall risk management and come out with concrete solution for it and it is mandatory for every business hat they must do it. Businesses succeed when management makes the right decision and management makes the right decision when the have right information, clear communication and right understand across the department and knowledge about upcoming and present risk as well. Management need to be very responsible while assessing risk and when company has implemented right risk model which is supported by latest technologies then there would be no second thought that management would lack in making the right decision.

Removal of Manual Tasks

It is completely understood the every company is having a lot of information like employee record, employee information, financial records, bank details, company data etc. regardless of their sizes and nature and which they have to put into the system and manage it properly and for that, in modern days, if you’re not having an updated and fully automated version of risk model then there would not be just risk of losing the information or data but also the theft of it as any sort of information is very important for every business and they are answerable of it as well and if you’re having a good and secured system implement in your organization then it’s an assurance that your company is working in a safe environment. By going automated, the process of data entry and keeping the information is safe and less time consuming than manual and this practice is also very helpful for risk management as well for identifying and mitigating risk and to come to the conclusion and eventually making the right decision.

Risk Analysis and Reporting

By having automated risk management system, risk managers get the most updated and highlighted information by which it gets easier for them to evaluate and mitigate the risk. Risk automation simplifies the risk analysis process as by this process all the information and data is being collected on continuous basis and is organized as well and risk managers have an across to most updated and accurate information which helps them in identifying the risk and coming to the best possible solution for it. This helps to enable them to report on the details that matters the most and actually represents the meaningful image and impact of the risk department and you also don’t need to collect the data and information from various sources, but it just become a click away.

Better Decision Making

When all of the management and staff is having access to reports, company just not gains the trust and confidence of their employees that their management is having the right data and information, but it also helps in making the right and most effective decision for their company and employees. Decision making is always supported by data, information, insights and communication. It is less likely the decisions makers are not aware of all the contents mentioned earlier because by the help of automated risk management model, risk managers and decision makers always keep their selves up to date with all the information required for which they have automatic alerts, notification reminders and else.

Compliance management is a process which ensure that the employees in an organization are following the set of rules that are given to them and there’s no breach in it. It ensures that the policies and procedures are being followed in accordance to their setup. Here rules mean compliance strategies and benchmark, while process means what manages their compliance system.

Compliance management is mixture of functions like policy, procedure, documentation, internal auditing, third part audits, security controls etc. and it is having mixture of responsibilities is one easy and simple to use interface but if any of these functions are not performing well then it can affect the whole system of organization. Compliance management is one of the most important tools of GRC that an organization have to ensure that the system is being run correctly. It also helps in ensuring company’s culture are in one place. Compliance culture and compliance management system are the extra features which help the business to improve its compliance management. Why compliance is so important for implementing into any business system?

The answer to this question is that, if compliance system is implemented right they can uplift the whole organization’s framework and when the framework is working fine it can gives a lot of successes to the organization and when organizations perform well the ultimately give benefits or economy of a country which is important for any nation or country of the world. If worked correctly on five major areas of compliance management, then it can work more better and perform well.

Identification

For identification of risk in compliance management that a company faces and advise on them, there’s a separate system and function for it which is apparently is quite expensive and contain good expenses because it leads to identify the unaddressed risks, lower profit margins and the areas which are not managed properly. There could be many reasons why company’s compliance management system becomes ineffective and don’t perform well but lack of adequate planning, training, execution and unskilled team are usually the chances by which happens to be the bad compliance monitoring.

Prevention

Design the compliance management system according to the nature of your business. If the system is not design in such a way than the compliance management and even the system won’t be able to mitigate risks and won’t be able to protect company from those risks.  The systems are designed and built in such a way that which frees business from any kind of worry that business may face in terms of identification of risk, setting rules, making policy and procedures, documentation, audit or kind of security controls. It helps a company to prevent from most possible failures that it can face.

Detection

Good compliance tools helps a company in detecting risk and where ever the flaw is possible. It monitors it and report the effectiveness of controls in the management of a company so that they can better work on the flaws and failures that might paralyze the system. Company’s qualified compliance management experts run after an environment which can better the risk which the company might face and try make the system as compliant as possible.

Resolution

Currently organizations need the compliance management system which can resolve compliance difficulties as soon as they appear. They are most likely to implement the compliance environment which can just not detect but also resolve the issues when they face. They are in need of a compliance system that can help in handling the compliance framework and issues related to  internal and external regulatory change management better. Compliance system requires an environment which helps in detecting and resolving periodic risks, development of policies and procedures, establishment of training plans, communication of compliance material etc.

Advisory

Companies need to implement an environment which just and mitigate and resolve the compliance related issues but also help them giving them advise on how to keep their systems protected from every possible failure. For that, companies spent a huge a mount of money to have best compliance management system for regulating the better environment in an organization as compliance management is a heart for any business regardless for their size and nature. It helps in identifying the laws, make policies, documentation, monitor compliance controls, compliance reporting and else. There are a good number of vendors that a re available in market which advises the best solutions which can be great help of their businesses.