Risk Management in the Financial Industry: It’s the documentation, stupid!


An industry obsessed with risk management—and rightly so

A Russian security firm recently reported that cyber thieves have managed to steal about $1 billion from banks in 30 countries. Days later, the head of New York's Department of Financial Services warned that our financial system is vulnerable to disruption by "an Armageddon-type" cyber attack: a large-scale hack could damage the US economy as severely as the 2008 mortgage crisis. Add to that the financial industry's concerns about the uncertain and volatile global marketplace, increasing pressure from regulators and rising costs of doing business, and it's easy to see why risk management is such a hot topic nowadays in Wall Street boardrooms.

Documentation problems are a major cause of risk

Financial organizations are highly regulated, complex and information-intensive enterprises, and documentation problems are at the root of many of their risk management issues. Their ability to operate efficiently, compliantly and securely depends on how readily employees can access, understand and share ever-growing amounts of mission-critical information stored in huge content repositories. Keeping this information accessible, understandable, accurate and up-to-date is an ongoing challenge. The penalties for failure include greatly increased exposure to risk.

You and I experience the financial industry's documentation problems as time we spend on hold wondering why it's taking so long for a customer service rep to answer our questions or as frustration when we're unable to complete an online transaction or find information on our bank's web site. But the industry's documentation failures also have other, graver consequences. Security lapses result when employees can't follow poorly written IT policies and procedures. Unclear or out-of-date information causes confusion in execution of electronic funds transfers. Poor documentation leads to failed audits, lapses in compliance and other costly errors and inefficiencies. All of these issues add significantly to risk.

Technology solutions aren't working—the industry needs to manage information better

In recent years organizations across the financial industry have begun investing heavily in technologies designed to give them better control over their mission-critical information. Their struggles to make these technologies function effectively have been lengthy and costly. A major obstacle to success has been the lack of an effective approach to creating information architectures based on logical organization and structuring of modularized content.

Financial organizations can greatly reduce risk by improving the way they manage their mission-critical information throughout its lifecycle. By systematically addressing the quality and consistency of documentation they can operate more securely, compliantly and efficiently. An incidental benefit will be increased ROI from the new technologies that are presently serving them as expensive and difficult-to-use file cabinets.

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Sunday, 09 August 2020

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