How to choose a scalable risk management software

Gayle Woodbury
Defining your requirements

Risk professionals at growing financial services companies are repeatedly asked to do more with less. This tension can lead to solutions that maximize efficiency, but it also tends to draw the focus toward immediate needs, sometimes at the cost of long-term strategy.

In the case of governance, risk, and compliance (GRC), that strategy usually revolves around some type of risk management software, especially as your bank grows and your program becomes more mature. So, if you’re a risk professional at a growing bank, how do you identify the risk management software that can accommodate your company’s growth and satisfy your compliance needs?

The consideration you should keep top of mind is that you need GRC technology that scales with your business. Your business’ changes might be growth-related – such as moving into new product offerings or lines of business – or your organization might at some point enter a different market. Regardless of the reasons, growth and change are inevitable.

The contract term for GRC tools can span multiple years, and it’s almost certain that your business will evolve over that period. So, if you buy a solution that can’t adapt to those changes, you run the risk of getting stuck with software that doesn’t meet your needs. A flexible risk management software can scale to your requirements and offers modules to address new areas of risk as needed.

Start by defining your requirements for risk management tools and software. 

Requirements for risk management software

Before you begin evaluating your risk management software options, you need to identify your stakeholders. Remember that the group of stakeholders for GRC tools isn’t limited to members of your risk and compliance departments. Everyone who either uses or is affected by the system is a stakeholder, too. Your C-suite, your board, and your business-line teams all have a stake in this critical decision.

Next, find out from your stakeholders what their requirements are for the system. Then, take stock of your current systems. For each system, determine what’s working well and what isn’t. Having the feedback from a cross section of stakeholders that spans your first, second, and third lines should give you a comprehensive list of requirements.

This process is labor-intensive, but it’s essential to be as thorough as you can when mapping out your requirements. You can’t determine the best technology to meet your needs without an accurate assessment of your products, processes, and stakeholder needs.

Point solutions offer a short-term solution at the cost of creating additional long-term challenges.

Short-term point solutions

For many smaller banks, it might appear that the safest purchasing option is a point tool that addresses your most urgent area of need, such as third-party risk, cybersecurity, consumer complaints, or internal audit management. A point solution only affects a small part of your processes and business operations. Point solutions also tend to cost less than full-suite GRC platforms, so it’s often easier to make a case for investment.

The personal stakes involved in a point solution also seem more manageable. Crowe professionals often hear from risk and compliance folks some variation of: “If I buy the point solution and don’t like it, I can probably get out of it.” And maybe also: “If I can’t get out of the contract, I’m only affecting myself, and I can suffer through the contract term.”

However, the decision to adopt risk management software affects more than one area of your GRC program, even if that area will be the only one using the tool at first. Point solutions might not always integrate with each other or with other platforms, or they might be very costly to integrate. The inefficiencies from nonintegrated systems also can pile up over time – especially as you add more point tools to cover areas of risk. By starting down the road of point solutions, you can set your bank’s entire risk GRC program up for future inefficiency and growing pains.

Enterprise-level platforms provide a long-term solution but can overwhelm your short-term resources.

Enterprise-level platforms

If you decide to forgo point solutions, most often the next logical step is to consider a fully integrated GRC platform with the functionality to address all your use cases and areas of risk in a single location.

Historically, it’s been impractical for small and midsize financial services companies to adopt a full-suite solution. Even setting aside the larger upfront investment – both in terms of licensing fees and implementation costs – implementing an enterprise-scale GRC platform requires a degree of GRC program maturity that most banks under $10 billion in asset value haven’t reached, and it’s hard to justify the added expense to develop.

Since most enterprise-scale platforms weren’t designed specifically for the financial services industry, you also might need to customize the platform to your needs before you can use it. And for a growing bank or credit union that’s still asking fundamental questions about the nature of risks and whether the right controls are in place, customizing a large, open-ended GRC platform from scratch is an overwhelming task.

However, not having full maturity doesn’t mean small and midsized financial services companies have to wait and grow more before starting on the path to risk management maturity.

Crowe IRM-as-a-Service combines scalability and functionality for the long term with implementation costs you can handle in the short term.

Scalability and functionality for the long term with implementation

Crowe works with a diverse range of financial services companies both over and under $10 billion. Our experience showed us that those under $10 billion had no available option that could combine the affordability and ease of use of point tools with the functionality and scalability of a full GRC platform. So, we created Crowe IRM-as-a-Service – a ready-to-use platform that delivers all the benefits of true integrated risk management with an approach tailored specifically to small and midsize financial services companies.

The solution provides curated content based on your unique business profile as well as use cases you need to support your risk and compliance management programs. So, it’s ready to use within days of purchasing instead of months or even years. If you think you might not have the right resources to execute on expanded processes or that you might not know how to maximize your investment, don’t worry – Crowe will designate a client success manager to guide you. And getting access to Crowe specialists for help is a matter of a few clicks in the system.

With Crowe IRM-as-a-Service, you can start with the core modules you need today, and as your company grows, different departments can adopt additional modules within the system. The solution is fully managed from the cloud, so you don’t have to spend time on administering a tool and can focus instead on the risk and compliance activities that inform strategy and foster growth.

To learn more or to schedule a consultation and demo, visit the webpage for Crowe IRM-as-a-Service.

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Gayle Woodbury
Gayle Woodbury
Principal, Financial Services Consulting