Uncertainty and resiliency have been major themes of the past year. Risk management strategies in financial services have undergone a significant change over the years. While many of those changes resulted from new financial regulations that were designed to prevent an additional crisis, technological advancements have also raised customers’ expectations and created new risks. Now with the pandemic, banks have had to alter operations to coincide with CDC guidelines.
As a result of these alterations, banking has shifted to a remote, online realm. This can enhance convenience, as well as provide a safe working environment, but online banking has also allowed for a significant increase in threats and has pushed several issues to the top of the priority list for bank executives across the country.
Many financial service firms and other organizations have been busy overhauling their IT and cybersecurity systems as regulators begin to clamp down on consumer privacy and data security. Information technology risk exposure involves a complex mesh of vulnerabilities that crosses through different departments and functions within the business and its operations.
Banks are also taking further notice of third-party risk management. Organizations increasingly rely on third parties and suppliers/vendors to provide critical business services. While this form of outsourcing has helped reduce costs and increase efficiency, it has also introduced governance, risk management, and compliance (GRC) challenges. As such, organizations struggle to manage a vast network of relationships, including conducting due-diligence assessments, monitoring vendor performance and stability, and ensuring that risks to the organization’s sustainability are kept in check.
Banking is one of the most heavily regulated industries, and regulations will likely increase during the remainder of 2021, while fairness in servicing is expected to become a growing issue in the coming months. Financial institutions are bogged down by regulatory overhead and compliance expectations.
With these growing concerns, it will be important for banks to focus on limiting cyber-attacks through developing a secure risk and compliance framework and analyzing third-party risks to cybersecurity.
To cope with evolving risks and a stringent compliance environment, financial services firms need a GRC solution that provides a better understanding of risk across business functions. A successful GRC framework requires a comprehensive approach to data integration and management to gain complete visibility into your institution’s risk and compliance posture.