Nowadays, a massive transformation is taking place in the financial industry. The advent of evolving economic structures, increasing regulatory requirements, innovative technologies, and new market trends are driving the sector towards business models emphasizing on a network of holistic governance, risk, and compliance (GRC) management. The rapid transformation of the financial landscape makes it crucial for the banks to analyze and assess the ways used to manage and reduce risks.
Compliance is the most essential aspect of the GRC model. A shift towards a more comprehensive GRC model has greatly increased its influence in the corporate ecosystem. Legal and regulatory requirements should be incorporated into the market trends and internal policies of any organization after the uncertainty around them is managed through compliance.
However, compliance is just one element of the model; the other two being governance and risk management. Here’s a brief overview of the pillars of the GRC model.
• Governance: An overall approach that includes the processes being established and implemented by the management and projected across the organization
• Risk Management: A set of activities that have been designed to spot, assess and respond to risks that might affect the achievement of goals
• Compliance: This conforms to legal and regulatory requirements by putting into place the needed policies
A successful GRC initiative depends on four critical tools-resources, strategy, technology, and procedures. In order to take the necessary actions, it’s important that the right people get the relevant information. This can be achieved by integrating the three pillars, their critical tools and the various departments involved and connect them wholly.