Today’s risk environment is complex and changing fast—which is why financial leaders need new technologies to keep up.
You know that feeling when you’re on a rollercoaster and you come to the precipice of what is about to be a massive downhill plunge? There’s an excruciating pause…followed by a dizzying drop and the adrenaline surge of acceleration.
Throw in a few twists and turns, and that’s what the last decade of banking has felt like—especially when it comes to risk and resilience.
The way banks manage and plan for risks needs an update—not only to improve defenses against future disruption, but also to move more quickly through the disruption so they can re-focus on innovating for customers.
The good news is that while the breakneck speed of technology has changed the nature of risk, it has also given us the tools we need to fight back.
According to a recent ServiceNow and Thoughtlab survey, 63% of finance industry CEOs believe it is a priority to work on risk management and resilience. No surprise there. What is concerning is that only 29% of organizations surveyed are using digital tools or solutions to “introduce the cross-functional coordination of risk management.”
Advanced technologies like cloud infrastructure, automation, and AI-enabled workflows are making it possible for organizations to understand and manage the chaos of disruption. If a bank isn’t directing technology investments toward improving operational resilience, it's going to fall behind when the next curveball comes their way.
This becomes even more apparent when you consider the complexity of the operational risks banks must monitor—there are cybersecurity and technology issues, regulatory risks, third-party relationships, geopolitical issues, and natural disasters to list just a few.
[Does your business move at the speed of risk? Take this quiz to find out.]
Then there’s the internal complexity. Different teams are managing different risks and risk priorities. Different monitoring systems are used to identify potential issues, but that information doesn’t typically sit in one place. In other words, risk is often viewed and managed in silos.
That’s a problem, because when an issue occurs, it doesn’t necessarily limit itself to a single department. Information must be exchanged across teams—often via emails or spreadsheets. And while that might work fine for a minor problem, it’s not a great way to manage complex, fast-moving issues.
Moving at the speed of risk
To move at the speed of risk, banks need to bring information from different teams and systems together in one place, so they can tackle problems faster and more efficiently. That’s why so many banks are investing in cloud infrastructure.
Cloud infrastructure is the foundation for changing the way financial organizations manage risks. With it, banks can digitize paper-based processes—like business continuity planning—to improve the consistency and communication between teams. They can automate the monitoring of compliance controls and risk indicators and other mundane tasks.
Crucially, cloud infrastructure makes it possible to record all risk-related actions and communications in one place, so everyone is working from the same information at the same time. Banks can finally break down silos, creating a unified front to defend against risks.
Smarter defenses, improved reliability
With automation and artificial intelligence (AI), banks can address risks more proactively by detecting, prioritizing, and contextualizing issues. AI can even start to fix issues, laying the groundwork for faster, more accurate human-based decisions .
Organizations can even get ahead of potential problems. For example, when there’s an outage or degradation of service, smart technology can show banks potential areas of impact and controls that need to be changed.
Customers need to feel confident that their bank will provide consistent, reliable service no matter what happens in the world
Because security and reliability play a major factor in where customers put their money and investments, operational resilience is critical not only from a risk management standpoint, but also from a customer standpoint. Customers need to feel confident that their bank will provide consistent, reliable service no matter what happens in the world. This trust-based client experience is key to keeping financial institutions competitive in a world of shiny new fintechs—not to mention other banks.
Banks and their leaders have certainly been on a rollercoaster, and we’d be kidding ourselves to think that the ride is going to end anytime soon. But with the right cloud infrastructure in place, you can adapt to the ups and downs more easily, keeping your organization and your customers safer along the way.
This article was originally published on ServiceNow's Forbes BrandVoice page.
The Future of Banking Experiences
Financial Services: Whatever Next?
Unlocking customer experience transformation in financial services