The Top 8 Risk Reports for GRC Leaders

May 20, 2024

The current governance, risk and compliance landscape is complicated and rapidly changing. With factors ranging from the economy to the environment to artificial intelligence playing a part, it is essential for financial institutions, insurers and other regulated businesses to have a sound risk management program in place. The program does not need to be complicated, but it does need to contain certain critical elements.

First, an organization needs a catalog or register of all its organizational risks. A team of leaders in relevant departments and roles should rate the risks in order of impact and probability, identify risk owners, and store all of this information in a central repository from which reports can be generated for different target audiences. For example, a board of directors or executive team may wish to have a "helicopter view” of the organization’s risk profile, enabling them to make key decisions real time and with full context and understanding about the impacts.

The Impact of Centralized Data & Insightful Reports

Once risks are defined and documented, easy access and visibility to risk data and reports become critically important for a business to operate in the most effective way possible. By focusing on data and reporting, an organization can ensure its risk management program is not static — it should be a dynamic, frequently evolving process that is updated and adapted as the business and external factors change over time.

A proactive business will regularly conduct internal risk management reviews while leveraging horizon-scanning technology to understand the landscape of what is changing outside of their control. The outcome is a valuable view of emerging risks that may not be impacting the business yet, but are important to keep an eye on, such as:

• Outsourcing Key Business Activities — When processes or operations are outsourced to third-party companies, associated risks should be carefully controlled and monitored.
• ESG — Based on location and regulators, it’s important to manage risks arising from environmental, social or governance factors.
• Cybersecurity — This represents a huge risk across industries, requiring strong controls for mitigation. 
• AI — Organizations need to pay close attention to risks related to AI as they explore its power and opportunities.

Each organization will have different types and categories of risks depending on its profile. Once the risks are identified and rated, the management team should adhere to a defined mitigation process using a control framework. To closely monitor risk impacts and changes, leaders look to reports. 

The 8 Most Valuable Reports for GRC Leaders

Clear and organized data leads to high-quality reports that drive a positive risk culture. GRC leaders can look to these eight reports to guide their decision-making processes:

1. Regulatory Obligations by Regulator: Businesses use this report to identify and communicate their regulatory obligations and compliance requirements across jurisdictions. It is particularly important for organizations that operate across multiple states, countries, or groups like the European Union with differing regulatory demands.
2. Centralized Controls: This report identifies critical controls and key issues across an organization’s three lines of defense. It can help to reduce audit fatigue and over-testing and help prioritize spend and “right-size” risk prevention and mitigation efforts.
3. Key Risk Indicators: It’s important for any organization to drive accountability by monitoring quantitative data points (e.g., revenue, budget, staffing, customer satisfaction scores) that impact business goals and the risks that influence them. This report helps decision makers spot and address fluctuating metrics or adjust goals as appropriate.
4. Internal Audit Findings Summary: This report enables organizations to identify and communicate control failures, ensuring accountability and follow-up through assigned corrective actions.
5. Incident Management: By displaying the direct impact that incidents have on risks, this report can help organizations understand risk exposure, better communicate any financial losses, justify investment with near misses, and prevent additional exposure in advance. 
6. High Velocity Risks: This report allows organizations to identify and respond to rapidly emerging risks, like climate change-related natural disasters or cyberattacks, giving leaders a chance to mitigate those risks or convert them into opportunities.
7. Risk Movement: A well-designed risk movement report displays a clear view of changes to an organization’s top risks over time (e.g., month-over-month or quarter-over-quarter). This is a particularly useful report for board members and C-suite decision makers.
8. Strategic Reporting: This report ties risk posture to an organization’s strategic goals, providing a unified message from frontline staff, management, and internal or external auditors to the board. Connecting risk to strategy — and understanding the impact risks have on key performance indicators (KPIs) — drives a culture of risk-focused decision-making and helps GRC leaders gain executive buy-in.

Benefits of ERM & GRC Technology Platforms

GRC leaders can automate the development of these key reports by leveraging an ERM or GRC software platform. A robust system should integrate solutions or modules that track all the factors that impact the movement of risks. For example, an integrated risk technology solution should have inputs from and connections to modules for audit management, complaint and incident tracking, third-party vendor management, business continuity and disaster recovery planning, etc. Without that integration, organizations could easily miss out on key risk indicators early enough to protect the business.

ViClarity’s platform is designed to help financial services and insurance organizations remain agile and confident in an ever-changing risk landscape. For more information, request a demo today. 

Originally published in RegTech Analyst and FinTech Global on May 16, 2024.