Today’s digitally-savvy and modern enterprises, across a wide range of industries, have become data-driven. From businesses across healthcare or retail to technology, data is the new oil. Only those organizations which leverage the power of the right data can create a competitive advantage for themselves.
With new government resolutions and regulatory regimes, businesses are forced to pay more attention to risk and compliance analytics to prevent unethical business decisions and practices. Compliance and risk are the integral parts of any organization and the absence of either can result in distrust, loss of potential customers, and reputational damage to the organization.
In light of this, businesses have started putting together an organized plan to leverage the structured and unstructured data and harness its power to effectively monitor threats, frauds and comply with the rules. The use of data and technological advances in the analytics solution space help organizations reduce the chances of violating government compliance norms. Apart from this, a risk-aware culture in the organization works as the backbone for the proper functioning of the departments.
According to a survey by OCEG, more than 84% of the companies agree to the fact that using analytics in GRC would benefit their company in the long run.
Some of the key benefits of Risk and Compliance Analytics include –
Effective Risk Management – Monitoring of the complete risk lifecycle through visualizations for risk-based pricing, fraud detection, line-assignment, credit-risk modeling, loss forecasting, foreclosure prediction, risk-based pricing, and event modeling
Compliance management – Maintenance of compliance and effective business processes while reducing risks in areas such as environment, green technology, and International Trade Compliance
Fraud Management – Uncovering of new trends, fraudulent schemes, and scenarios
Audit Management – Managing the internal audits more effectively by aligning them closer to the business
Analytics, undoubtedly, is the future of risk and compliance. Some of the advanced analytics techniques that are widely used to adhere to the regulatory norms include –
Early detection of new fraud and risk associated with the organization
In-depth analysis of the text to detect problems in the written documents
Visual analytics to display the right information in front of the different stakeholders and regulatory bodies
Monitoring to keep track and mitigate the damage due to known compliance and fraud risk
Raising of risk-based alerts for taking better business decisions
The compliance teams within organizations need to constantly navigate the challenges of complexity and norm changes around compliance. The changing regulatory pressures over a wide variety of subject areas and the changing regularity environment keep the compliance teams on their toes. Technology has been the backbone of helping organizations with their risk and compliance management. There is no one-size-fits-all compliance management solution for all the organizations – the selection of the solution depends completely on the compliance needs of the organization, the budgets, and the available skills. Having said that, here are a few things which businesses must consider while selecting the solution-
Checking the functional coverage of the solution is important to understand whether the solution matches the requirements and business goals of the organization. Also, organizations need to check whether the solution covers some of the specific functions essential for compliance and risk management of various departments of the particular business.
The technological solution should provide a holistic approach to data gathering and analysis. It should provide a centralized ecosystem that gathers the data from various source systems and offers a one-stop solution for the analysis of that data.
Flexibility and Adaptability
Considering that the regulatory norms keep changing frequently, the technological solution should be flexible enough to adapt to such constant changes. The solution should be able to quickly capture the new changes without any impact on the legacy systems.
The data gathered for risk and compliance is very valuable and can be useful for the overall integrated analytics. The solution should be able to reuse this data so that minimal incremental time and effort are spent on data acquisition regularly.
Ease of Use
Another key aspect before selecting the compliance analytics solution is the degree of user-friendliness. It’s important to know the predictive text input, the total number of entries required to operate, and the level of customization of reports. Customization of reports is an essential feature to look for because it helps you alter the analytics depending upon the variables in the picture.
Compliance and risk analytics helps in preventing corporate scandals, fraud, and even civil and criminal liability of the company. It also enhances a company’s image in the public eye as a self-policing company that is responsible and worthy of shareholders’ and debt-holders capital. Today, every organization needs to take risk and compliance analytics seriously because it is the only possible way of identifying and addressing issues, which allows the company to avoid potential fraud, scandal, and even criminal behavior.