Making Risk Intelligence Accessible for Risk Managers

One huge advantage of living in the information era is that much of the information that professionals need is easily available over the internet through multiple sources. Things get a bit trickier when we talk about risk information for risk managers working in banks, because risk information is often not easily accessible. The information and data that the bankers need is available, but it is often spread out in multiple documents and spreadsheets from different sources. Simply compiling all the information and turning it into actionable intelligence is a gargantuan task for the risk management in the bank.

This is a major problem not just for banks but for the whole economy. Banks aren’t just businesses that create a profit – banks play a critical role in the local and national economy. Banks provide essential services to other businesses; without bank services some businesses cannot operate. Banks also provide credit and capital when required, ensuring that local businesses have access to emergency funds. When a bank faces a huge loss, the loss isn’t burdened just by the bank – its effects are felt on the whole economy.

The Challenge with Risk Data

Most risk managers ensure that their bank is safe from major risks by poring through many different data sources to create risk assessments. The problem is that a lot of this data is spread out in different documents in different formats. The bankers must first collect all the documents and spreadsheets that contain critical data, extract the critical data, standardize the data so it can be analyzed, and only then can the data be turned into actionable intelligence.

There are several challenges with this approach. The most obvious one is that this data is essential yet so many risk managers have to strive just to get it. However, that is far from the only disadvantage of handling this process manually. What’s even more problematic is that by the time this analysis is complete, the data is often outdated. There are several market related metrics that can change in the blink of an eye – what good is a report that took 2 days to complete if many of the data points within the report are no longer accurate?

Inaccessibility Leads to Ignorance

The efforts required to extract meaningful risk intelligence from risk data are often too great for smaller banks to sustain. The managers often make decisions without consulting the data first because the data is often unavailable. The only way to ensure that the latest intelligence is being factored into the executive decisions being made by the bank is to make the data easily available. Risk intelligence should be visible to all stakeholders easily so they can consult it whenever needed.

This is one of the most important and profound benefits that modern risk technology can provide. Risk managers, who previously had to create their own intelligence, suddenly find that they can get the information required to make the right decisions with one click on a dashboard within their new risk management system. This means that instead of first having to investigate what the problem is and analyzing different data points, the risk managers can directly access the latest risk metrics and intelligence. Instead of having to scavenge the data from multiple sources, it is provided to them in a single click.

Risk Data as a Competitive Advantage

Providing updated risk intelligence to the board and the risk team has other benefits besides protecting the bank – it can act as a competitive advantage as well. If a bank has access to real-time metrics and is making decisions based on the latest intelligence, then it can outplay the competition and prepare for upcoming changes faster than the competition. What’s important to understand is that risk intelligence doesn’t just help a bank detect risks – the same technology also helps a bank detect opportunities.

Every bank is concerned about risks that are increasing in severity or probability, but the other side of the coin is just as important. A risk decreasing in severity or probability sounds like something a risk manager shouldn’t be too concerned about, but it can represent a great opportunity for a bank. When a risk goes down, new opportunities open up in its place. This can mean that a bank can expand faster than it planned to, or it can invest in an area that previously seemed too risky to be a good investment. Having access to such information before the competition can help a bank reap the benefits by leapfrogging the competition.

Modern risk solutions like Predict360 can automatically monitor risks with real-time risk metrics, helping banks proactively mitigate risks. Interested in seeing how Predict360 can help your bank’s risk team and boardroom? Get in touch with us for a demonstration.