Some organizations are still relying on fragmented and siloed processes to manage their risk and compliance functions. Before much longer, this won’t be a realistic option for any competitive business. In every industry, technology is driving a cultural shift towards agility, increased efficiency and improved strategy. Outdated modes of managing risk and compliance may not be able to keep up, and mistakes will begin to slip through the cracks.
Technology is being leveraged by risk and compliance functions to help drive operational efficiency and effectiveness, resulting in positive effects on the workings of the wider company. The business becomes invigorated. It’s less about managing risk, more about harnessing risk with confidence. It’s possible to raise the profile and value of the risk and compliance functions, and distinguish the people within it as being adaptable and ready for the challenges of the future. Organizations that prove they can use their risk intelligence to their advantage may not only help strengthen their firms but can also build greater trust with both internal and external stakeholders.
More than two-thirds (67 percent) of CEOs believe that acting with agility is the new currency of business and that if they are too slow they will become irrelevant. So what’s holding so many people back? In KPMG member firm’s experience of helping organizations across the world to transform their risk and compliance functions, we’ve found some common reservations that executives hold about embracing digital transformation.
FEAR: This function is already complex enough. We don’t need to make it more difficult to understand.
FACT: Management is better positioned to make informed business decisions when they have ready access to meaningful risk and compliance data. A clear view of risk and compliance information across the enterprise, combined with the potential to integrate your data with that of other business functions, can actually reduce complexity and enhance transparency. Automating procedures can result in more robust risk and compliance practices, which can be more easily updated and monitored than traditional approaches.
FEAR: Technology-enabled risk and compliance transformations will be costly and time-consuming to implement.
FACT: You’re more likely to lower costs in the long run. Plus, the increased competitive advantage you gain by modernizing your risk and compliance functions may account for the initial investment in the program and technology enhancements. KPMG professional’s expertise lies in providing the most suitable integrated risk and compliance program and technology solutions for your needs. The powerful combination of experience and proven accelerators can be leveraged to drive impactful and sustainable transformation at the pace required in today’s dynamic business environment.
FEAR: People will struggle to adapt to new ways of working.
FACT: Professionals want to work with the same generation of technology in the workplace that they’re used to having at home… we all want to use technology and data to our advantage! This new technology enables the business to adapt, it doesn’t hinder it. Living in an age of increased expectations of risk and compliance teams as well as rapid, global economic change, a technology-enabled solution grounded in leading practices creates flexibility in the face of disruption. This is the foundation for continuous adaptation. Without it, competitor businesses may move so fast it’s hard to keep up. With it, you can dynamically adapt to regulatory, financial or government regulations.
FEAR: Automation will render my role irrelevant.
FACT: Actually, it can make you a lot more successful. The technology is there to support the crucial skills and awareness that risk professionals have developed within their industry. Automating labor intensive, manual tasks frees up resource for the risk and compliance department to strategize and conduct analysis more effectively. And rather than estimating what problems the company might face, you’ll have the data and insights that tell you with real-time risk reporting. Automation means you can have a better ability to identify threats that could result in fines, and you can control the rising costs of risk and compliance, controls and audit.
FEAR: Out-of-the-box solutions won’t accommodate the specific requirements of our company.
FACT: People come to KPMG firms because risk and compliance is our area of expertise. The technology and target operating models that we recommend have been designed by our professionals, leveraging decades of professional experience and leading practice insights, but we also take a consultative approach towards working with our clients – meaning we can tailor the solutions according to individual needs. And, if there are any potential challenges, you’ll have the benefit of our experience and full support throughout the transformation journey.
FEAR: These new technologies are too susceptible to cybercrime and exploitation.
FACT: Like anything, there’s a proper way of approaching the task, which can mitigate its risks. The key is to focus on the fundamental role of cybersecurity within the organization. Digital transformation can become your opportunity to embed data security throughout your corporate strategy. Future hiring to the cybersecurity function should focus on business skills as well as data security skills. And, for companies that have already focussed on building their cyber-resilience, they’ll now have the option of extending that awareness to consumer safeguards. Used sensibly, these technologies have the capacity to improve your security rather than weaken it.
In an increasingly competitive world, risk and compliance needs to be managed efficiently and effectively. It’s important to get things right the first time, rather than paying the price for mistakes. The question is, can you afford not to modernize?
The task shouldn’t be underestimated, but as a global organization, with risk practices in 29 member firm countries throughout the world, we’ve learnt how to provide advanced risk and compliance processes and technologies that meet our individual clients’ needs. Working with KPMG Powered Enterprise means you can benefit from the experience of over 800 risk professionals, with you every step of the way.
To start developing or enhancing your Risk and Compliance department, get in touch. We’d be delighted to show you what your future state could look like.
To find out more about KPMG Powered Risk & Compliance