The Challenge
- Siloed Approach To Risk – very few mortgage organizations have mature and structured processes and reporting on GRC that brings together an integrated and orchestrated view of GRC processes and information. Most organizations have fragmented approach where some aspects of enterprise and operational risk are more mature than others but fail to have an overall coordinated strategy where distributed business units and processes maintain their own data, modeling, frameworks and systems. This results in functional departments and business unit’s areas focus on their own view of risk and not the aggregate picture, unable to recognize substantial and preventable losses.
- Existing GRC Tools That Cannot be Replaced – When Mortgage organization approaches risk in scattered silos that do not collaborate, there is no opportunity to be intelligent about risk as risk interrelates and compounds to create a larger risk exposure than each silo is independently aware of. This happens because organization has existing governance, risk, information security, compliance and audit tools and legacy governance and risk structures which is hard to replace immediately with an overarching integrated governance, risk, Information, compliance and audit management system because of sunk cost in existing tools, not aware of advance technologies or egos or people that are just resistant to adopting new technologies.
- Below is response to survey done specifically with mortgage operational risk and financial risk managers showing how challenging it is to access internal data and multi-channel connectivity.
The Solution
- GRC Business Intelligence tool to sit on your enterprise landing data zone – While data is powerful, it is akin to raw material in construction. To achieve the desired outcome, one must refine and compose the raw material into something useful. Analytics are that critical step in unlocking and revealing the insights within data. Since legacy governance, risk and compliance tools within each business unit are going to be hard to displace and a tough sell to all business unit manager to replace their individual tools with an integrated governance, risk, information security and compliance management system all at once, an ideal solution can be to have a tool like Predict360 to sit on top of an enterprise landing data zone which can tie various risk and compliance data from all the business units through a common information and technology architecture to support overall risk management activities as well as you can get a view of the inter relationships of risk , compliance, action plans across all the business, understand the depth and breadth of risk and predict risk using artificial intelligence technology and leveraging all the risk data feeds.
Value
- You will become an intelligent mortgage organization once you understand the risk exposure to each individual process, project or an asset and how it intersects with other risks in each of business unit and aggregate the risk to get enterprise perspective on risk without replacing all the existing tools that the functional managers and business units are using. This alleviates the change management issue and less disruption to the organization.
- It will further allow the mortgage company to be competitive in an environment where every process and efficiency gains matters.
- Company is going to able to achieve optimal performance since now it can now analyze the impact of risk on strategy, performance, department, division, and enterprise levels.
A Case Study
Challenge:
- EVP of Innovation of one of the top 10 mortgage lenders which is also a bank with multiple product lines and business units was interested in having an aggregated risk from multiple inputs, governance structures and risk models so that they get a better understanding of relationships of risks, its inter-dependencies where it intersects, get an true enterprise view of the risk, its impact of various decisions to each business unit.
- Another challenge they had is that implementing a company-wide integrated governance, risk , information and compliance management platform was not an option and a tough sell to business unit leaders internally – Legacy tools, historical governance cultures, exposing their risk, compliance and action plans to other departments, managing their egos were among the reasons that were legitimate concerns.
Solution:
- This required a Governance, Risk and Compliance intelligence approach — This mortgage bank had recognized their challenges and build an enterprise data landing zone. Predict360, 360factors GRC Intelligence platform built on Artificial Intelligence technology to sit on an enterprise landing data zone can tie various risk and compliance data from all the business units through a common information and technology architecture to support overall risk management activities.
- This is a big change across an entire organization since it will question long-embedded internal cultures that tended toward bureaucratic, committee-based and siloed approaches to managing governance, risk and compliance. It would further expose accountability and responsibility metrics and make people understand that they’re going to be held accountable.