All companies, organizations, and agencies face the risks of harmful attacks or crises. During the COVID-19 pandemic, in particular, many businesses have become victims of these types of acts or events that can wreak havoc on their systems, operations, and finances.
According to a report, in 2020 data breaches reached a record high even while cybersecurity investments increased.1 In addition, there are a growing number of crises that interfere with businesses, including economic, geopolitical, supply chain, and natural disasters.2
Risk management and compliance professionals are at the forefront of business today, taking the lead in monitoring, planning, and protecting the security and safety of companies. A Chief Compliance Officer (CCO) is an expert at compliance oversight of laws and regulations, implementation of standards and procedures, and reporting to management, leadership, and the board about any issues or violations, as described by the International Association of Risk and Compliance Professionals (IARCP).3
Staff in risk management and compliance do not work alone or in a silo. They must partner as a whole with leadership and employees within an organization to collect data, provide information, ensure compliance, and prevent risks.
Here are four areas to consider or put in place for the future of your risk management and compliance:
- Do Initial and Continual Third-Party Due Diligence
Third-party risk is a heightened concern for risk and compliance. There has been an increase in the use of these parties, who are enabled access to company assets.2 Gartner suggests doing research on third parties before and throughout relationships with them.2
A survey of industry professionals found that 43% of third parties do not have a condition of being due diligence checking, and third parties are not monitored for risk on a total and ongoing basis by 60% of those who responded to the survey.4
- Develop an Integrated Approach to Risk Management
An integrated management system (IMS) can provide a holistic view and approach to risk management and compliance. It creates a centralized system of a company’s policies and procedures, so they can better manage risks across inter-related areas.2
Also referred to as integrated risk management (IRM), this can involve staff from compliance, risk management, legal, information technology, audit, and other departments related to risk management.5 Leadership are responsible for assessing, monitoring, mitigating, and reporting risks with resources, finances, operations, disaster or health events, and other areas.5
- Empower Oversight of Risk, Regulations, and Governance
Appointed chief risk officers (CROs) and other risk management and compliance professionals will help manage strategies on integrated processes and operations. Board committees also will help assess organization-wide risks.5
Risk or compliance officers and boards are braced for an influx of changes in regulations, especially regarding the United States government and Brexit.6 Companies will be expected to report, monitor, and test more, as well as increase their transparency.2 Regulators will concentrate on helping to find risks through technology-based data.2
Governance, risk management, and compliance (GRC) systems will be another area of focus. It is predicted that the future will include faster risk velocity (the time generated for risk exposure to impact a company), agility with GRC and workflows, and quantitative versus qualitative risk analysis.1
Environmental, social, and governance (ESG) also will be addressed. Risks associated with the climate will be a priority for regulators, while sustainability and financial disclosure will be monitored by the European Union (EU).7
- Make a Bigger Impact with Available Resources
Risk and compliance officers and staff are taking on more tasks and responsibilities to protect the security of organizations at lower costs.2 Many organizations are adding technology and outsourcing resources to assist in this work, such as Mango Live compliance software.2
A survey examining financial firms and compliance found that increased operational and staffing support investments and resources were needed.6 Similar budgets were envisioned by 36% of survey takers versus 42% that foresaw a bit higher budgets. Additionally, 62% of participants predicted added time and resource costs for handling issues related to risk.
Staying abreast of information, data, and input is essential for managing risks within an organization. Businesses should watch for and report possible risks associated with third parties or other situations.1 This may come from using technology or communicating with workers on the front lines.1 Leadership may also step in to tie risk to the bottom line and impact on businesses.1
Get Started with Risk Management and Compliance Support
Risk management and compliance take an integrated approach to prevent and manage the many risks that can impact companies. With dedicated tools, technology, and data, businesses can help protect the security of their operations. A PEO can help lead the way with these services.
We are here to assist you any time. For more information, connect with our SBS Payroll team.
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