How Enterprise Risk Management Software is Beneficial to the Banking Industry?
Retail and investment banks among others firms that offer financial services are big users of risk management solutions as anyone would expect. Having these solutions in place is essential. Enterprise risk management solutions work by identifying the risks linked with a particular set of assets and informing a business about them, usually through on screen dashboards.
The software does this by gathering and collating data across the enterprise information technology systems and indicating where the risks lie. Enterprise risk management software also assists organizations to manage their IT risks by informing them about security breaches.
The software can also inform a bank to refresh its security when an event occurs. Risk management also supports business continuity by identifying actual and potential IT breakdown. By using risk management software, banks can mitigate risks from financial investments and cover security breaches as well as breaks in business continuity.
Risk management is important to providers of financial services because the Basel 2 accord enforces it. This international regulation requires banks to make sure that their cash reserves are adequate to cover the expense of issues in the business, including IT failures and fraud. The following are some of the reasons why enterprise risk management tools are beneficial to the banking industry.
- Identifying and classifying business risks – Enterprise risk management software identifies risk and classified it accordingly. Once the risks are identified and classified, banks can take the right measures to evade them.
- Taking the necessary actions to minimize the complications linked with business risks – By using a task based calendar and industry checklist, a risk management system takes the necessary measures and reduces the complications of risk. The software generates a customized approach to mitigate risks based on the unique needs of a bank.
- Securing data – Enterprise management software secures the data related to a bank with password protection, therefore limiting the availability. It also provides complete protection to data storage system with the assistance of automated backups.
- Real time recording – When using risk management software, it is easier to update and record information that is related to risk.
- Relevant and accurate – Risk management solutions use real time data. The outcomes are relevant and precise to the operation of a bank, making it easier for the managers to view risk in real time.
- Automated risk reports – The reports of ERM tools offer clear data on the objectives. It also offers information on the associated risks. These reports also inform users about the actions they need to take to prevent risk. Enterprise risk management software ensures that enterprise wide risk exposures are reported in all areas to the board of directors and senior managers. It provides for the periodic evaluation of risk management processes and systems within a bank.
Banks can benefit by working with a provider of enterprise risk management solutions, such as Laser GRC. At Laser GRC, we offer sophisticated, web based softer solutions for Internal Financial Control, Internal Audit, Legal Compliance Management and Risk Management. Our governance, risk management, and compliance (GRC) solutions are intelligent and intuitive. They can be implemented in their individual components and integrated solutions or combined in innovative ways to come up with solutions to address the unique needs of your organization.
At Laser GRC, our goal is to collaborate with our clients and develop cost effective and innovative GRC solutions to assist them solve important business issues. We also seek to create value for our stakeholders and customers.