Banks and financial services organizations strive to implement and manage controls to mitigate risks and safeguard their organizations. The primary method for risk management today is manual management across multiple tools. The primary challenge with this methodology is that risks and control management is often ineffective and/or outdated. Their role is too critical in the realm of risk management for there to be vulnerabilities due to human error, and human error is inevitable with manual processes.

Obstacles to effective controls management

Risk management departments are tasked with managing the risks controls across the organization. This is a key task that involves identifying risks, creating controls, implementing controls, evaluating the efficiency of said controls, and then continuously monitoring controls to ensure that they remain effective.

Manual processes complicate efficient controls management. Without a dedicated solution with control management workflow automation, risk managers end up having to create an ad-hoc solution with general-purpose software. Most organizations keep the control information and evaluation in documents, the status of all controls in a spreadsheet, and most of the communication is handled via email.

This creates many vulnerabilities in the process. Human error can impact important control-related information if data is inadvertently accidentally missed. If there is an issue in the results of a control test, someone needs to ensure that the information is manually entered into the spreadsheet where control efficacy records are stored. It is the responsibility of the risk manager to maintain the documentation, typically managed in spreadsheets, and collaborate with stakeholders via email to evaluate risks and controls. First-line employees must also look at which risks are linked with the control and then ensure that the spreadsheet that contains risk evaluations is up to date.

Control management solutions can streamline the management process and increase productivity and accountability. Share on X

A minor mistake in any of these steps can result in erroneous risk and control data. If the information about the control test is not entered into the spreadsheet then the rest of the organization will have no idea that a risk has increased in severity. If the person that manages the spreadsheet fails to contact the right people, the problem may remain unsolved. If no one updates the risk evaluations, then upper management and boards of directors will not know, in real-time, that a control they depend on is not working properly.

May organizations overcome these challenges through redundancy. They ensure that multiple people are responsible for each step so if a single person makes a mistake, other one will catch it and fix it before it causes problems. While this does increase the accuracy of the work, it causes a significant reduction in productivity.

Streamlining control management with technology

Control management solutions can streamline the management process and increase productivity and accountability. Such solutions centralize the process of managing controls and presents all the required information in real-time reports and dashboards.

Automated workflows

Instead of depending solely on first line employees to ensure that the right process is being followed, control management solutions automate the workflow. This is accomplished by providing a central platform for all control documentation and activities. When an employee uploads a document related to a control, it is automatically linked to that control. There is no need to manually keep a spreadsheet and update it whenever a control document changes – the changes are instantly visible everywhere. There is no need to notify anyone if a control test fails – automatic notifications go out to all the assigned stakeholders. Everyone simply needs to ensure that they do their part – the system brings all the pieces together automatically.

Smart mapping

Control management systems create links within the system. All documentation related to a control will be linked to it as well as related risks and follow-up actions. This means that when risk stakeholders need to get complete, up-to-date information about a control, they simply need to click on its record to access all relevant data. Dashboards provide a birds-eye overview of risks, controls and actions to more quickly and easily prioritize follow-up activities.

Corrective Actions

There is no need to reach out to people via email and ask them to work on a control. Managers can instead directly assign actions to employees within the control management solution. This makes it easier to follow up with all the actions. Since all the information is centralized within one system, management only needs to log into one source to view key data and activities being undertaken to address any issues.

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Control Taxonomy

Large organizations often struggle with control taxonomy. Business lines may be using different naming conventions for the same controls or risks. This can create redundancy and blind spots. Different naming schemes may result in duplicated efforts and controls being put in place because. The blind spots are an even bigger problem – a risk may be affecting multiple departments but be categorized differently by each department. Management will have reduced insight into emerging or critical risks.

These are just some of the features and tools which make it easier to manage all the controls in the organization. Want to learn more or see the solution in action? Get in touch with our team for a demo.