The weight of a bank merger or acquisition can be overwhelming. For chief risk officers (CROs), the job increases from managing risk functions to answering for the combined outcome. This increased pressure can make it difficult to see beyond the challenges of the process, and the organization could miss important opportunities.
How can CROs keep up risk and compliance management while building toward something better?
A merger is an excellent time for CROs to take a step back and consider new approaches for their risk and compliance programs. Three areas of focus include:
This collection of post-merger integration checklists can help CROs:
After all, a merger is not just about getting larger. It’s an opportunity to assess talent, adjust culture, and implement new technology for a new approach to managing risk.
Poor customer experiences, potential fines, and reputational damage keep stakeholders up at night. Mergers often mean higher risk complexity, and things can spiral out of control quickly without a vigilant eye.
It’s crucial to empower leaders and retain talent because having the right people in place is essential for responding to critical – and sometimes murky – moments.
Documented processes and policies are important, but sometimes organizations need to pivot. Being nimble and responding quickly to key risks is crucial.
It can be difficult to know if a platform can cover everything an organization needs, such as transaction monitoring, customer risk, sanctions screening, and governance, risk, and compliance.
Combining two programs means it’s time to look for overlaps and potential. With the right people, processes, and technology in place, team members can focus on creative problem-solving instead of resolving fire drills.
Forward-thinking leaders can change how the organization thinks about risk. Choosing new team leads and communicating goals can help the organization embrace a new way of thinking.
It’s important to evaluate risk appetite and risk tolerance across the operations, products, services, and customers of both organizations and to align their related processes.
The first step toward more effective compliance is understanding how technology can support the manual processes in both organizations.
Even CROs with a vision still must maintain day-to-day business. New offerings, services, markets, geographies, and customers bring new expectations to be managed through the merger, so a solid business continuity plan is critical.
Staffing challenges can crop up in your compliance team as risk management expands.
Monitoring losses and incidents, key risk exposures, and early warning indicators take on a new level of difficulty with an influx of factors.
Connecting internal technologies isn’t always smooth. It’s important to know ahead of time where conflicts and gaps could occur.
From methodologies to technologies, CROs will need to find common ways of cataloging and defining risk across different products, services, and audiences.
Teams can work better when aligned with updated policies, uniform monitoring, and properly allocated resources.
It’s important to understand where risk goals overlap and gaps exist across operations, products, services, and customers.
A merger is an excellent opportunity to assess the maturity of risk management platforms and develop a plan for more collaborative, big-picture compliance.
It’s important for stakeholders to know where merger progress stands, so CROs must have up-to-date and accurate reporting to present to the board. Getting buy-in for investments and adjustments relies on hitting benchmarks and supporting progress with data.
Showing how a unified approach aligns to the bank’s greater goals can help garner support from the board.
Process reviews show where improvements could help the board make more informed, effective decisions regarding the merger.
Technology can offer transparent reporting with the most up-to-date results and information for board review.
