Businesses are often blindsided by risk or compliance related blind spots because we often focus on managing risk and compliance issues that have been detected. These blind spots are areas where the business has little-to-no visibility, thus emerging risk and/or compliance issues in the area may not be detected until it is too late to address proactively. Understanding these blind spots is the first step to eliminating them.

What is a blind spot?

The simplest explanation of a blind spot is that it is an area that cannot be observed due to perception limitations. We all have blind spots in our eyes. Due to the shape of the cornea it is possible for something to not be seen by our eyes. You can find out your own blind spot through the tests on this website. You will notice that most tests require you to close one eye – that’s because our brain eliminates blind spots by combining visual data from both eyes.

We also have blind spots on the side mirrors on our vehicles. If you’ve driven older cars you may have experienced these blind spots. Sometimes a car will just appear from the side – you will not be able to see it even if you were looking at the side mirror. We usually brush it off as a mistake we must have made. Modern vehicles often have special sensors which tell you when there is a vehicle on your blind spot. You can even buy small mirrors which help eliminate blind spots.

Risk and compliance management blind spots can be eliminated by employing automation in risk and compliance monitoring and assessments. Share on X

Understanding how blind spots form in risk and compliance

Blind spots are caused by a lack of proper perception. Risk management and compliance management are both highly complex domains, and there are visibility gaps in most management methodologies.

Risk management blind spots

Risk management blind spots are caused by lack of access to real-time data. Traditional risk reports take a considerable time and effort to create, analyze and publish. Because risks are easier to mitigate if they are detected earlier, the delay caused by manual report creation can hide significant deviances, which are then harder to mitigate. When risk managers are managing risk manually, they have no visibility into the real-time risk levels across the organization. There are no dashboards which can alert them about issues and no data feeds that tell them about key risk indicators. They must manually create reports and analyze the data if they want any insights into risk.

The lack of standardized risk and control taxonomies is another major problem. Each department or business line reports its own risk assessments but often have no shared evaluation or agreed upon controls between the departments. The same controls may be referred to by different names in reports by different departments. The same risks may also be named differently, which means that management will not be able to see that a risk is affecting multiple departments when they read the reports.

Eliminating risk management blind spots

Risk management blind spots can be eliminated by employing automation in risk monitoring and assessments. Automated risk management solutions can detect when a risk increases, automatically alerting the assigned stakeholders so they can immediately mitigate the risks. Risk analytics are also crucial for eliminating risk management blind spots. Predictive analytics enable organizations to detect emerging risks and proactively mitigate them. Risk insight tools collect internal and external data and use it to extrapolate emerging risks. The internal data includes all the key performance indicators and issues which can affect risk levels such as customer complaints, risk reports, market data, regulatory changes, and much more.

Compliance management blind spots

Compliance blind spots are caused by a lack of visibility into compliance activities across the organization. Compliance managers can create strategies and explain to other departments how the strategies need to be implemented to ensure compliance. The problem is that they cannot monitor compliance related processes in other departments. They only learn about compliance issues when a department self-reports a compliance issue, an audit reveals a problem, or when the compliance reports are formulated after a quarter.

Compliance managers have the responsibility of organization-wide compliance without having organization-wide control or visibility. Businesses invest a lot of time and money to train employees and ensure that all departments understand what they need to do and why they need to do it. Management’s biggest fear is not being able to detect a compliance issue until it is too late. If a compliance issue is uncovered by a regulatory body, it can cause a lot of damage to the business. The regulatory body will claim that since the business did not detect the problem, the compliance controls within the organization are not strong enough.

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Eliminating compliance management blind spots

Compliance management blind spots can be eliminated by continuously monitoring compliance levels and tracking compliance activities. While every organization needs to ensure it trains its employees properly, compliance cannot be left unchecked. There need to be compliance controls in place that can detect issues and allow businesses to resolve any compliance shortcomings as quickly as possible. Compliance managers need access to a dashboard through which they can view compliance levels across all the departments of the organization.

Eliminate all blind spots with automation

Businesses can use risk and compliance technology to eliminate all such blind spots. If you are looking for a solution that provides you an unprecedented level of visibility and control over risk and compliance, then get in touch with our team to learn more about Insight360.