Integration is the key to managing silos. Risk silos are caused when risks are managed separately instead of in an integrated way. Handling risks with a myopic lens makes it more challenging to remain aligned with business strategy as things continuously change. This article at Forbes by Kayvan Alikhani explains how vital it is to integrate risk and compliance management to mitigate risk silos.
Here is a recent high-profile case on siloed risk and compliance management. The University of Phoenix (UOP) falsely advertised having a relationship with renowned companies leading potential students to believe they would have job opportunities with such companies. This deception cost UOP a $191 million settlement. The incident exemplifies the narrow vision of siloed decisionmaking. Another example is Capital One, whose lack of comprehensive risk management strategies left them vulnerable to a hacker who stole the personal data of approximately 100 million Americans and six million Canadians, resulting in an $80 million fine to Capital One.
Managing risk can often be a challenging business issue when it’s lost within the depths of departments and silos without an integrated approach. Modern organizations require the ability to see and understand risk at all levels.
Integrating Management Efforts
In light of the rapidly changing risk landscape, consider these steps to integrate your risk and compliance management efforts:
Integrating Compliance and Risk Management
Integrating risk and compliance management processes will provide more significant insights and capability to make better-informed decisions for your organization. And notify the right stakeholders whenever a new risk arises or the team implements change.
Identifying and Prioritizing High-Risk Activities
Identify and measure the likelihood of risk and then the magnitude of its impact on the organization before prioritizing your compliance requirements. The same rule applies to risk management. Prioritizing compliance and business threats can reduce your risk exposure and help you improve your action plan.
It is essential to communicate compliance and risk reporting changes across your organization. By doing so, the team has a better understanding of the business goals and can identify activities that pose a high risk, leaving the business less vulnerable.
To read the original article, click on https://www.forbes.com/sites/forbestechcouncil/2021/07/21/the-rise-of-risk-silos-how-to-unify-risk-and-compliance-management/?sh=26b3f0f14f23