The nature of risks is continuously changing and evolving at unprecedented levels and hence implementing a successful risk management program is the call for organizations looking to safeguard their hard-earned reputation. Failure to do so could be detrimental, as many organizations in the past have realized the hard way.
Paul McNulty, former U.S. Deputy Attorney General was noted to have said that – “If you think compliance is expensive, try non-compliance”. And this can be validated by the fact that globally compliance costs organizations roughly around $5.47 million, while non-compliance costs, including fines, business disruption and losses in productivity and revenue, cost around $14.82 million, which is almost three times the cost of maintaining compliance requirements.
According to a recent industry report, the enterprise governance, risk and compliance (eGRC) market is projected to grow at a CAGR of 8.5% by 2025, backed by the fact that organizations need to increasingly meet the demands of the complex regulatory landscape. Integrated GRC platform is the only solution to help businesses manage risks across the organization while driving overall enterprise performance while being flexible enough to keep pace with a rapidly changing environment– all with an industry-focus. As these platforms allow companies to meet their GRC targets by automating the workflow, the organizations are adopting GRC platforms to enhance their operational activities.
Compliance that is digitally enabled and data-driven provides a clear understanding on evolving regulations, so the industry leaders can anticipate risk. There are many regulations like – financial reporting regulations, export regulations, General Data Protection Regulation (GDPR), health and safety regulations etc., which companies must follow. Certainly, the business of doing business is not simple, and if the organizations are to achieve any measure of success by implementing GRC across the system, they need technology. Regulation technology (RegTech) plays an important role in strengthening the monitoring and management of risks in the organization. Industry pegs the GRC market value to exceed US$ 47.1 billion by 2024, making it a pivotal component within every organizations corporate framework. Here are a few key technologies in GRC that will define the next chapter for the industry:
Artificial intelligence as a service
Artificial intelligence (AI) in GRC is the need of the hour. As companies expand their digital footprints, cybersecurity vulnerabilities increase due to huge amount of data being produced. Surely, the demand for the intelligent use of accumulated risk data will only increase. GRC solutions that incorporate AI and its application machine learning (ML), will play a major role. The key players in GRC industry shall offer AI-as-a-Service (AlaaS), particularly to industries where data is too valuable.
Big data to reinforce risk management
Big data can be extensively used in frauds and money laundering management. With businesses becoming more and more interwove, the threat of risk has increased, and hence big data analysis has become an essential tool for risk management. Also, it significantly reduces the cost of risk management, with automation and lower risk of failure.
RPA eases legal compliance concerns
Robotic process automation (RPA) can be an important tool to build more robust and effective compliance programs. It will support continuous control monitoring as well as full sample-auditing, making it easier to detect anomalies. All these advancements will enable GRC functions to deliver greater value, and act as true strategic advisors to the business.
Finally, the potential impact of Blockchain on GRC cannot be undermined. Blockchain technology can be used as an addendum to the best practices within the vast realm of compliance. The immutability of blockchain records equates to a verified chain-of-trust and proof-of-process for compliance.
With the introduction of new technologies, comes a plethora of unknown risks but also a wave of new insights and solutions for businesses. Certainly, the businesses of the future shall embrace new technologies to support enterprises and their activities, to be ahead of the curve on GRC.