The COVID-19 pandemic has highlighted how ill-prepared and ill-equipped businesses around the world really were to tackle a crisis of such magnitude. So, while digitization and automation have emerged as the major focus areas for organizations to be able to quickly adapt to the new normal, so has an agile, integrated, and technology-driven approach to risk management. In KPMG’s COVID-19 risk assessment survey of key managerial personnel, a majority of respondents (75%) said that they feel the need for the adoption of technology-based solutions to monitor key risks and their mitigation.
The pandemic has also brought conversations on frontline engagement to the forefront. Being closely engaged in daily business activities, it is the frontline that is more likely to identify emerging risks and vulnerabilities. As such, there is a growing call among risk and compliance leaders to make the frontline more agile and entrusting them with more risk management responsibilities—moving beyond the existing risk identification and management role in day-to-day activities to control ownership and accountability.
Frontline Taking the Lead Role
Delegating more risk management responsibilities to the frontline, making them risk-aware, and empowering them with proper training and tools has become critical for organizations to efficiently navigate today’s complex business risk environment. Companies are also increasingly engaging with the frontline in the designing phase of the risk management framework itself. Factoring in the frontline’s valuable insights on end-user perspectives, latent and emerging market trends, and more will enable organizations to ensure the relevancy and effectiveness of their risk and compliance programs.
In addition to owning and managing risk management decisions on a daily basis, the frontline today is also tasked with ensuring the effectiveness of controls. Risk and Control Self-Assessment (RCSA) is an important tool that the frontline can use to assess the operational risks associated with their activities and the efficacy of controls that address those risks. This way, RCSAs empower the frontline to make confident, informed decisions.
Bolstering the capabilities and responsibilities of the frontline, in turn, enhances the risk monitoring capabilities and oversight of the second line. A collaborative and synchronized effort of the three lines, in a way that is aligned with business strategy and goals, will help improve risk visibility and forecasting capabilities and make an organization nimbler and more responsive.
Organizations can leverage MetricStream Observation Management which simplifies capturing risk intelligence from the frontlines. The product helps bring GRC to the frontline with engaging platforms, widgets, browser plugins, conversational interfaces, chatbots, and intuitive web forms.
With the MetricStream Arno Release, the product now enables frontline users to capture risk and compliance observations, which can then be triaged and categorized as case and incident, loss event, or issue. AI-powered recommendations can be leveraged for categorizing the observations thereby increasing the efficiency and effectiveness of the triage team. Once triaged, the management and monitoring of actions to address them can be automated.