A risk is defined as “the potential for loss due to uncertainty” or “the possibility of something bad happening due to lack of security”.
From these definitions, we can safely incur, that to reduce risk, organizations should not only be extremely risk-aware, but also have impeccable security measures in place. In order to make organizations guarded from various types of risk, (Material/Physical Risks, Cyber Risks, Reputational Risks, Legal Risks, or Operational Risks) there are several measures that can be put in place – one of them being ERM or Enterprise Risk Management.
ERM is the practice of analyzing potential risk and creating a plan to control risk-eliminating activities. It helps view risks from a bird’s-eye view – at an organizational level – and create strategies that ensure mitigation of risk.
However, with the digital revolution unfolding, information/data dependency has drastically increased. This also means that the IT or Cyber-risks are rapidly evolving and call for a comprehensive methodology to deal with them.
Integrated Risk Management (IRM) specializes in handling the risks prevalent in an organization’s technological infrastructure. While it still includes multiple elements of Enterprise Risk Management, it takes a more polished, all-encompassing approach to risk management. It equips an organization to acknowledge, understand, and curb their distinct risk scenarios.
The correct implementation of IRM is highly dependent on an organizations’ risk-awareness and ability to –
- Create and implement governance, risk assessment, and risk ownership framework.
- Identify upcoming risks internally and externally.
- Create and implement a response strategy.
- Continuously monitor business objectives, update governance policies in accordance with goals, remain updated on new types of risks and threats, and comply with regulations.
- Adopt the correct IRM solutions to build a strong and unified risk management architecture.
What are Integrated Risk Management Platforms?
Traditionally, GRC (Governance, Risk, and Compliance) Platforms took a siloed approach to risk management. This often led to negligence of important details and increased vulnerabilities.
GRC Platforms helped manage –
- Governance – The framework of rules and guidelines that create a foundation for all business practices.
- Risk – The possibility of an organization facing losses due to negligence, breach, non-compliance, or poor governance.
- Compliance – Following the framework of rules established to ensure governance and reduction of risk.
As time has passed, GRC platforms have morphed into being more flexible, less siloed platforms. They now view risk management as a whole – with governance and compliance being an integral part of the risk management process. These evolved Governance, Risk and Compliance (GRC) Platforms are now known as Integrated Risk Management (IRM) / Centralized Risk Management (CRM) Platforms.
Integrated Risk Management Platforms help organizations cope with their ever-increasing risk management needs. The various functionalities of IRM Platforms are listed below –
- Manage risks across data security, cyber security and compliance areas spanning across various locations or sources.
- Standardize risk assessment methods and risk management frameworks across siloes to unify risk management practices across business functions.
- Provide visibility into threat exposure, risk interconnections, vulnerabilities and their impact on overall security measures.
- Create an internal audit process to provide specialized risk assessments and insights.
- Create a tracking framework dependent on business policies to make compliance and data usage ethics stronger. This tracking also helps locate and remedy violations.
- Store all the data required to monitor risks securely on a centralized database.
- Create risk libraries that catalog the most critical risks and provide accurate and actionable data pertaining to the threat history for an organization.
- Analyze risk-related data and present comprehensive reports with heat maps, risk summaries and risk-control dashboards.
- Automate risk management tasks, deliver reminders and record events.
- Highlight compliance related risks through continuous monitoring and real-time updates.
Apart from these, IRM systems can also manage end-to-end third-party risk assessments by reaching out to external databases and gathering information continuously to help organizations mitigate risks.
Integrated Risk Management Platforms are advantageous because they help organizations to reduce the manual labor that goes into ensuring information security for an enterprise. Additionally, there are multiple other advantages that automating risk management can bring.
- Identify and analyze risks at the organizational level and create a strategic plan for risk management.
- Execute risk management and compliance policies.
- Speed up decision-making by providing a comprehensive list of the risks and pain points involved.
- Create a bridge between the planning and execution of governance and compliance policies.
- Become and remain risk-aware and proactive in risk management.