Rarely is one specific moment to blame when something goes wrong. Instead, it is a culmination of a chain of events, with multiple mistakes leading to that final result.
What does this mean for risk management? You can’t focus solely on the outcome, for starters. You have to look at the bigger picture in order to create change, and in the financial services industry, that can be harder than it sounds. This is true even on a smaller, bank-to-bank scale. Risk management can help a company contribute to a stronger economy, and it can also help that firm improve customer service and bolster its own bottom line.
In order to help your bank address risk in 2015, here are a few things you should know:
Focus on your communication
Communication is critical when it comes to risk management. As you work to establish a plan in 2015, make sure yours is functional for your business.
Communication can be your greatest asset in risk management – or your greatest enemy.”
For example, global management consulting firm A.T. Kearney cited the oft-used jargon of financial services as an impediment to risk management. During a meeting, an employee could very well go in-depth on legislation changes, including plenty of acronyms in his or her speech. The other employees may have no idea what is being discussed. When going over risk management issues in a group setting, make sure the dialog is accessible to all in attendance.
Most importantly, the risk needs to be conveyed effectively and clearly to everyone across the company. This is the best way to take proactive measures to protect your bank.
Use 2014 as a guide
It can actually be beneficial to take a look back as you move forward. In an article for American Banker, Susan Palm, vice president of industry solutions for MetricStream, highlighted a few of the key risk management trends that were present in 2014.
One problem Palm noted was emerging risks. Over the past year, a number of banks had difficulties adapting to new hazards. One such issue was cybersecurity. Consumers have a desire for mobile and computer-based banking, and the financial institutions were quick to comply – but sometimes slow on the security end of the spectrum. Now, cybersecurity is a top priority for banks, according to Palm.
You can also leverage new technology to further improve risk management. For example, cash recyclers and similar tools will provide you a way to streamline cash handling and improve branch security. It can also free up your tellers’ time to focus on other areas of risk management.
Make risk management a company-wide issue
Risk management can’t simply be a problem covered by upper management at your bank. It must be an issue that is discussed from the top to the bottom, or else your strategies will never be wholly effective.
With that in mind, focus on getting your entire team on board. Hold group meetings and post flyers and notifications. Go over potential risk management strategies as a group, and get input before making any changes. This will help your bank prepare for a successful and prosperous 2015.