Integrate With Risk Management Governance
This practice is closely linked to establishing more streamlined risk controls and nurturing a company-wide risk-aware culture. In this case, standardized processes are pivotal and everyone is accountable, not just the compliance department. The communication begins at the highest level of management right down to maintenance staff.
What You Need To Know About Banking Compliance
Compliance is one of the most important challenges for any banking institution operating in todays market. Non-compliance has consequences, and in 2020 alone, several banks received major fines amounting to $11.39 billion. U.S. banks Goldman Sachs, Wells Fargo, and JP Morgan Chase paid upwards of $7.50 billion toward this total tally, indicating that even the sector leader isnt immune. Naturally, any form of negligence within this realm of operation can lead to big losses, especially considering how strict legislation has become in the sector.
Processing Financial Services Data Requires Tech Changes
In the aftermath of a succession of crises, the financial services industry has undergone a decade-long consolidation and is doing so under tighter regulatory regimes.
Hence, the response to the waves of regulatory requirements will have to include tackling the data management infrastructure, and that process will have to start with moving data out of silos and incorporating the content that is generated by social media.
A solution architecture that incorporates all types of data stored across systems enables financial institutions to obtain a 360-view of their data relating to risk, customers and trades. It also facilitates e-discovery.
Beyond compliance, this capability is critical for monitoring and making informed decisions especially when coupled with BI tools. The time to market and implementation schedules are significantly lower than that of traditional approaches providing operational efficiency at an enterprise level.
Conventional ETL-heavy processes inevitably cause delays as data needs to be identified, aligned, and transformed. Solving the data challenges and subsequent development lifecycles just cannot be ameliorated with current technologies.
In the next blog we take a deeper look at five major factors underlying the GRC challenge and how financial services firms can address them.
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What Are The Elements Of An Effective Grc Program
OCEG has developed an open-source GRC Capability Model. This model integrates various disciplines such as governance, risk, audit, compliance, ethics/culture, and IT into a unified approach. It can be applied to a range of situations and different compliance subject areas. It can also be used alongside more specific functional frameworks from organizations such as ISO, COSO, ISACA, NIST and others.
This model was developed with the help of a panel of 100+ experts based on a study of 250+ large organizations to document best practices.
The Four Components of the GRC Capability Model are:
LEARN about the organization context, culture and key stakeholders to inform objectives, strategy and actions. During this step, the goal is to learn about key influencing factors in your external and internal business contexts, so you can set meaningful objectives.
ALIGN strategy with objectives, and actions with strategy, by using effective decision-making that addresses values, opportunities, threats and requirements.
PERFORM actions that promote and reward things that are desirable, prevent and remediate things that are undesirable, and detect when something happens as soon as possible.
REVIEW the design and operating effectiveness of the strategy and actions, as well as the ongoing appropriateness of objectives to improve the organization.
OCEG has also developed several companion tools to this modelall of which can be downloaded from OCEGs website .
Guided Implementation Of Regulatory Requirements Industry Standards And Compliance Frameworks
Hyperproof has created a series of starter compliance templates to help organizations jump-start their journey to compliance. At this time, weve launched templates for the most popular cybersecurity and data privacy frameworks in the market, including SOC 2, ISO 27001, GDPR, CCPA, PCI DSS, NIST SP 800-53, and more. Each template comes with requisite requirements and illustrative controls. Once you choose a template, you can easily upload existing files, tailor controls to their specific environment, create new controls, and iterate your way to full compliance.
You can also upload your existing compliance framework into Hyperproof and manage it in the software. Once a program is up and running, Hyperproof will automatically notify process/control owners if and when any requirements change, so they know what they need to update/change to stay in compliance.
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Senior Management Should Be Fully Onboard
The benefits of a unified GRC approach should be clear to any members of senior management. After all, it means better access to reports, analytics and evidence which help shape strategic decisions. Plus, improved risk management processes mean those strategic decisions are well-informed in the first place.
Senior management should provide a clear idea of the organizations overall aims and strategy, which in turn will set the tone of the GRC project. If the board can decide on a unified GRC strategy, it will be easier to embed the project in the wider organization.
Common Features Of Grc Software
The table below lists common features you need to look out for when buying GRC software solutions.
|Prepare, store, and archive audit reports, risk assessments, compliance reports, and attestations.|
|Notifications||Alert administrators or other authorized persons about elevated risks, compliance breaches, or any unusual activity through messages or emails.|
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How Innovation Has Shaped Grc In Financial Services And The Next Generation Of Key Trends To Watch
Sameer Pendse, VP & Global Solutions Lead, Mphasis
The past fifteen years have seen a huge evolution in the role of technological innovation within the field of Governance, Risk and Compliance and its impact on the global financial services sector. The shifting innovation trends can be categorised into five generations currently were in Generation 5, which is yet to mature in terms of the key developments emerging in the industry.
What was the trajectory that brought us to this phase and, crucially, what lies ahead for financial institutions in their innovation journey?
The rise of AML, artificial intelligence & machine learning
In Generation 1, around fifteen years ago, the focus was for financial institutions to implement financial crime prevention programmes, driven by Anti-Money Laundering , using traditional automation techniques. These programmes leaned on commercial-off-the-shelf tools for AML, know-your-customer verification and sanctions screening.
For some financial institutions, namely tier 2 organisations, COTS solutions proved costly and difficult to implement and support. As the need for AML became a more pressing concern, due to increased cyber-crime, the size of knowledge worker teams grew larger as a greater number of alerts needed investigation. Thats where a gap appeared for advanced automation.
Growing prominence of cloud & financial risk management
What innovation trends will drive Generation 5 for banking?
Grc Meaning And Definition
In simple terms, governance, risk, and compliance, or GRC, is the strategy and structure that keeps an organization secure and on track. Corporate governance, like the governance of a city or country, defines the principles and agreements that people live by and provides the controls and support needed to achieve overall goals. Risk management identifies threats while introducing processes to protect against them. And finally, compliance management ensures that the organization abides by regulations, follows proper accounting practices, and operates ethically.
GRC is the strategy and structurethat keeps an organization secure and on track.
Think of governance, risk management, and compliance as the three legs of a tripod that keep an organization in balance:
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You Can Start Seeing Results Now Not In Months
You want to implement a new GRC program. But you fear it will take forever to identify every risk and control, let alone gather all the points they need to be mapped to. And then theres all the regulatory guidance that must be followed.
Its a big job. But you dont have to do it alone.
Weve designed programs and tools that work with your core system to make implementing GRC programs faster than ever.
We also provide content you can customize to put the new processes in action right away. Additionally, our compliance automation services can help you manage regulatory requirements and better serve your customers.
Adopting A Grc System
An entire industry has emerged to provide companies with the consulting services necessary to implement a GRC system.
GRC proponents argue that increased regulation, demands for transparency, and the growth of third-party relationships make the traditional siloed approach too risky.
GRC software is also available. Some highly-regarded software packages, according to CIO.com, include the IBM OpenPage GRC Platform, MetricStream, and Rsam’s Enterprise GRC. The article notes that more affordable and even free GRC software is available, though with fewer features.
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Current State Of It Grc In Banking And Other Financial Services
Now that the concept of GRC has been defined, its time to delve into its current state.
Currently, the global financial industry is transitioning from old GRC modelsbased on inflexible processes and spreadsheetsto dynamic models, which use innovative technologies to visualize operations in real time for better decision-making.
Heres an overview of the current state of information technology GRC in banking and other financial services.
What Are The Top Grc Certifications
Professionals with a GRC certification must juggle stakeholder expectations with business objectives and ensure that organizational objectives are met while also meeting compliance requirements. Thats an incredible amount of responsibility, and its absolutely necessary in todays business climate.
All kinds of job roles require or benefit from a GRC certification, including CIO, IT security analyst, security engineer or architect, information assurance program manager and senior IT auditor, among others.
Here are our top picks for GRC certifications:
- Certified in Risk and Information Systems Control
- Certified in the Governance of Enterprise IT
- Project Management Institute Risk Management Professional
- ITIL Expert
- Certification in Risk Management Assurance
- GRC Professional
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Tips When Implementing Grc
Implementing a GRC model can seem complex, as it will generally include internal auditing of existing processes and procedures. Its likely that each established area of the organization will have its own way of performing risk assessments or compliance monitoring. But a unified approach with shared expertise is the best way to achieve the overall aims of the organization.
With this in mind, there are ways to make the launching of the GRC program more straightforward. Here are five tips for implementing a GRC framework in an organization.
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What Are The More Serious Grc Risks
Organizations should perform risk assessments when considering wider business aims and objectives. Risk assessments identify potential issues throughout the business operation. Some of the more serious risks include:
- Financial risks
- Cybersecurity threats
- Commercial liabilities
These risks can impact teams differently throughout the organization. Teams most impacted by the issues above include:
- Business analysts
A GRC framework ensures these different teams are all working towards the same objectives.
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Challenge : Lack Of A Comprehensive Grc Framework
Businesses that are running fast and successfully have been able to do so because theyve taken the time to develop a flexible and comprehensive GRC framework. As business opportunities evolve, so do regulations.
When business units seem solid on the surface, but not adequately integrated, it further complicates the process of developing a well-crafted, comprehensive GRC framework. While it is true that every department or business unit has its own goals to achieve and needs to address, there also needs to be a close alignment between these processes and the overall organizational goals.
It is also important to define a strategy that brings all of this relevant, insightful data together, and prioritizes critical tasks and high-impact audit activities, in order to enable enterprises to make well-informed risk management decisions and mitigate exposure to incidents that cause loss or risk.
Why Does Your Organization Need Grc
Organizations face a rapidly changing and increasingly complex business climate. Whether youre part of a large corporation, government agency, small business or nonprofit, youll face numerous challenges, including:
- Constant changes to regulations and enforcement that severely impact business operations
- Stakeholder demand for strong performance outcomes, consistent growth and transparent processes
- Growing costs of addressing compliance requirements and managing risk
- Increase of third-party relationships and associated governance challenges
- Potential legal and financial consequences resulting from lack of effective oversight and overlooking critical threats
A disorganized approach to GRC can slow down an organization and cost more all while achieving less, missing requisite compliance requirements and misidentifying threats to your revenue or reputation.
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There Seems To Have Been A Failure Of The Three Legs Of The Grc Concept:
The apparent failure to tie these three components together with the data that has probably been available in the incidents/complaints made suggests that more emphasis should be placed on developing, recording and assessing change in KRIs and KPIs to head off this type of situation before it blows up.
Grc Tools Can Streamline The Process
GRC tools such as compliance software or reliable board portal software will help streamline the project. GRC software will provide one area to record all the different risk assessments and internal audits. In addition, it can help directly with compliance monitoring. This centralized data can then be accessed and visualized remotely, for instant access to trends and records.
The GRC software will also help to trace the different processes and procedures used within different teams or roles. By centralizing processes within one piece of software, organizations can explore the trends found within different silos.
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Why Do Organizations Need Grc
Stakeholders depend on strong business results and expect organizations to operate with high levels of transparency
The regulatory environment is volatile and uncertain
The exponential growth of third-party relationships has made risk a big management challenge. Not only do third parties represent a risk if they do not deliver their service or product in a timely fashion, but your organization can be exposed to and held liable for ethical/compliance lapses of third parties
The costs of addressing risks and regulatory requirements are spiraling out of control
There are harsh consequences when threats and opportunities arent identified
The OCEG emphasizes the importance of shared responsibility and integration in GRC activities. Their research found that when risk management, compliance, corporate social responsibility programs and departments are siloed, they are often ineffective and create issues such as high costs, lack of visibility into risks, inability to address risks and difficulty measuring risk-adjusted performance.
On the other hand, when the different functions of an organization are working as a cohesive team, sharing information, utilizing standard processes and a shared technology stack, organizations can ensure that the right people get the right information at the right times that the right objectives are established, and that the right actions and controls are put in place to address uncertainty and act with integrity.
What Does A Strong Grc Strategy Look Like
Too often, organizations believe that buying a single GRC software system or forming a specialized department will help resolve all of their GRC-related concerns. However, a robust GRC strategy is about more than a specific tool or set of roles. An effective implementation involves:
- Defining the right objectives for your organization
- Ensuring smooth communication and that the right information always reaches the right people at the right time
- Establishing and enforcing the right set of actions and controls to address risk and compliance needs
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What Type Of Buyer Are You
Industry regulations and the increasing risks of new and advanced security threats make GRC solutions invaluable to all organizations. Below we discuss two broad categories of businesses and the key attributes they need to look for in GRC solutions.
- Small and midsize businesses : GRC platforms offering basic functions such as reporting, auditing, risk management, and compliance management will help such buyers ensure organization-wide compliance and uniform risk mitigation strategies.
- Large enterprises: Enterprises are under scrutiny by a larger number of regulations than SMBs due to their scale of business and, typically, geographically-distributed operations. Multinational companies should look at GRC solutions that offer support in different geographies. They may also need to opt for customized GRC solutions to meet their specific compliance and business policy needs.
Additionally, there are GRC solutions that cater to specific industry verticals such as banking and financial services , healthcare, and governments/public sector. Ask vendors on your shortlist if they offer GRC software solutions tailored to your industry.