Solving IT Risk Management Challenges in Financial Services

Risk managers in the financial services industry are navigating a vast web of regulatory requirements, a constantly evolving risk landscape, and rising customer expectations. All of this change and volatility amplifies the seriousness of establishing effective IT risk management and compliance processes.

As banks and other financial institutions adapt to these challenges, many have started to leverage technology to improve customer satisfaction and drive efficiency. However, with great innovation comes great risk.

Regulators have been doubling down on measures to improve financial and banking practices. As institutions increasingly rely on information technology to support critical operations and functions, IT risk management programs are receiving increased scrutiny.

While digital transformation offers many positive benefits, the increased reliance on technology also exposes organizations to a growing number of risks as cyber threats continue to dominate headlines. These shortcomings can largely be attributed to a lack of visibility within the organization’s IT risk management framework and a lack of risk information.

Top 7 IT Risk Management Challenges

The greatest IT risk management challenges in financial services today are:

• Remote working
• Continuous compliance monitoring (not just a checkbox)
• Third-party reliance on information and technology
• Constant changes and updates to the regulatory environment
• Internet of things (IoT)
• Managing and communicating regulatory and business changes
• Pervasiveness of information

Thomson Reuters’ annual Cost of Compliance survey reported that financial services firms are confronted with 217 regulatory changes each business day. A number of these changes impact IT governance, risk management, and compliance, and the regulatory burden is only expected to grow.

Financial institutions face both an unprecedentedly high level of responsibility within the economy and expectations from consumers and regulators. IT runs through the entire organization and its operations, and it’s important to develop a holistic approach to IT risk and compliance to gain complete visibility and drive effectiveness, efficiency, and agility.

Keeping track of the evolving spectrum of regulatory requirements requires a strategy for IT risk management that is aligned with your institution and its objectives. To achieve strategic alignment, organizations need integration throughout IT risk management, processes, procedures, and information. A lack of integration leads to inevitable regulatory and risk exposure.