GRC stands for governance, risk, and compliance — an umbrella term for the programs, processes, and practices that organizations implement to:
OCEG, a nonprofit think tank, popularized the acronym GRC and defines the discipline as "the integrated collection of capabilities that enable an organization to reliably achieve objectives [governance], address uncertainty [risk management] and act with integrity [compliance]." 1
Governance ensures that corporate structures, policies, and processes align with strategic objectives and the organization’s mission and values. Good governance supports a commitment to ethics and compliance, transparency in communication and information-sharing, and agility in decision-making and responding to change.
Risk management addresses the risks and threats an organization may face through processes for risk identification, measurement, assessment, mitigation, monitoring, and reporting. An enterprise risk management (ERM) program helps organizations develop a comprehensive and consistent approach to addressing risks across business units and functions, including categories such as strategic risk, operational risk, compliance risk, financial risk, and reputation risk.
Compliance is the process of conforming with laws, rules, regulations, prescribed practices, internal policies and procedures, or ethical standards. The financial services industry is subject to particularly stringent compliance requirements, supervised by both federal and state regulatory authorities.
U.S. financial institutions are required by federal regulators like the CFPB, OCC, FDIC, FRB, and NCUA, among other agencies, to comply with regulations and laws such as the Bank Secrecy Act, Fair Credit Reporting Act (Reg V), and Truth in Lending Act (Reg Z). 2 Non-compliance may result in regulator-imposed fines in addition to other costs like lost business, litigation expenses, or reputational damage.
GRC management has come a long way from binders full of documentation, spreadsheets, and other manual processes. A GRC program that can keep up with the pace of change and adapt to your organization’s evolving needs must unite processes and technology to enable strategic decision-making and real-time risk and compliance insights.
Implementing a GRC program supports organizational strategy and performance while equipping teams to overcome specific risk- and compliance-related challenges and build maturity in areas like business continuity, vendor management, and cybersecurity.
For organizations in regulated industries such as financial services, a formalized GRC program provides a single-lens view of governance, risk, and compliance data and activities, along with centralized documentation and reporting for employees, examiners, auditors, and other stakeholders.
Strategic: Equips management to make informed, risk-based decisions that align with business objectives.
Integrated: Information is shared across business units and departments, reducing duplication and breaking down data silos. This equips all stakeholders — from executive leadership to the teams managing day-to-day GRC activities — with a better understanding of risks and opportunities and their impact on business outcomes.
Digitized: All governance, risk, and compliance activities are united in a single system or platform, creating a standardized framework and single source of truth for your organization. Digital transformation of GRC functions enables automation of manual processes, simplifies workflows, and centralizes data and documentation.
To develop a GRC program roadmap that considers your organization’s current and future needs, start by evaluating your challenges and goals, along with potential benefits and risks:
Budget limitations or lack of organizational readiness don’t have to prevent your institution from adopting GRC processes and tools.
Starting implementation with the highest priority use case or most urgent management initiative equips institutions to start building or maturing their GRC program while seeing immediate business benefits.
A phased approach to GRC maturity starts with one or two functional areas like risk management, compliance, or vendor management, to establish:
Once your organization has established the foundational elements of a GRC program — the right people, processes, and technology — in one area, you can:
This approach allows organizations to focus on building critical GRC management capabilities at a pace and scope that matches their needs, then leverage initial improvements to work toward program maturity and expand functionality.
An integrated GRC strategy requires cooperation across departments and organizational structures — such as the board of directors, management, risk, compliance, and audit — to standardize processes and share data, metrics, and risks.
Integrated GRC (sometimes called "integrated risk management") unifies risk and compliance processes enterprise-wide. When supported by a consistent management framework and technology that enables data integration, an integrated approach to GRC can:
Without connecting the dots between governance, risk, and compliance management activities, businesses miss opportunities to make significant improvements in risk awareness, decision-making, and organizational performance.
GRC programs that don’t leverage integration typically rely on manual tools like spreadsheets, shared files, and other disconnected data sources.
These methods may get the job done for a time, but can’t provide the kind of data access, aggregation, and oversight that equip your organization to make informed, risk-based decisions.
Even some GRC systems or software platforms that claim to offer integration may not provide the functionality or flexibility to extract insights and connections from your GRC data.
Look for a GRC system that supports automation and data-sharing through:
A GRC tool or software platform, implemented in conjunction with good processes, provides one system of record for all governance, risk, and compliance management activities, data, and reporting.
Technology solutions equip organizations to reduce the time and employee headcount spent on GRC management.
For teams managing day-to-day risk and compliance functions, GRC software can automate time-consuming tasks like data aggregation and report generation. Managing documentation like vendor contracts, business continuity plans, and corporate policies can all be handled in one system, along with tracking associated due dates and action items. Plus, core GRC activities like risk identification, assessment, and mitigation benefit from a standardized framework and shared database to ensure consistency and accuracy.
For executives and other decision-makers, GRC software provides visibility into the organization’s risk and compliance posture while cutting costs and increasing productivity across functions.
Organizations’ experience implementing GRC software largely depends on the type of solution they choose. On-premise software or piecemeal products that don’t work together tend to require extended installation and implementation processes.
By contrast, software-as-a-service (SaaS) solutions can accelerate time to value with flexible, cloud-based options that meet immediate management needs but also offer a path to GRC maturity. A scalable system that enables quick wins in a couple of key areas — such as third-party risk or business continuity — helps teams managing GRC address top priorities and pain points while facilitating expansion as capacity or resources allow.
Save time and streamline tasks: By reducing reliance on cumbersome manual activities and developing consistent and repeatable processes, software simplifies GRC activities with features like automated workflows, task management, and reporting.
Address change and uncertainty: Respond proactively to change and emerging risks through continual risk oversight and compliance monitoring. A single software platform gives your organization the data and visibility it needs to take a holistic view of your GRC program and act on risk and compliance insights.
Eliminate data silos and increase access to risk information: With one system of record for risk and control data and other GRC information, stakeholders have access to the information they need to make strategic decisions. When data is shared across departments and program oversight is not dependent on spreadsheets and manual data entry, teams can break down silos, avoid duplication, and improve the accuracy of risk assessment and other GRC processes.
Enhance agility in decision-making: An integrated GRC software platform offers data access, reporting capabilities, and overall visibility into risk and compliance issues scattered across the organization — which, in turn, empower strategic decision-making that leads to better business performance. Launching a new product or service, contracting with a new vendor, or reacting to market changes becomes faster and more efficient when you have the data you need to analyze risks and opportunities.
Improve communication, transparency, and accountability: Investing in GRC technology allows organizations to create a single source of truth for all their risk and compliance management activities and data. This gives stakeholders — from management and board members to regulators and auditors — actionable reporting and insights. A shared hub for all program documentation also streamlines collaboration across internal functions and departments.
Expedite the adoption of best practices for GRC management: Software reduces the burden of building a GRC program from scratch and helps organizations develop a common, cross-functional framework for managing core risk and compliance activities. A flexible software platform should meet your immediate management needs while facilitating future expansion and program maturity.
Every organization manages governance, risk, and compliance at some level, whether or not they have a formal strategy. Implementing a comprehensive GRC framework, supported by technology, is essential in today’s operating environment and needs to go beyond a "tick-the-box" approach to avoiding major risk events or maintaining compliance. An ad-hoc program — with each department managing its own GRC activities separately — may work up to a point, but eventually siloed management across areas such as ERM, compliance, operational resilience, and IT security will produce duplicate or inaccurate data, complicate reporting, and may even conceal potential risks.
A unified strategy sets the foundation for organizations to take an enterprise-wide view of GRC. When supported by GRC software that provides cross-functional data integration, a well-designed GRC strategy equips teams to:
Learn more about our governance, risk, and compliance solutions for banks and credit unions.