Why Financial Institutions Need Risk As A Service (RaaS)

Business models are evolving worldwide, and their processes are becoming increasingly dependent on technology. On the other hand, customers today are intolerant of preventable errors. While all this has put pressure on financial institutions, they still have to cope with intense competition. This means innovating with new financial instruments that offer higher flexibility and meet market demand. All this is happening against the backdrop of a global regulatory environment that is constantly changing.

In other words, financial institutions are facing challenges associated with strategic, compliance, operational and liquidity risks. Then there are risks, such as data protection, which fall into more than one category, hampering multiple business facets. Plus, multiple factors influence these risks, including market competition, changes in interest rates, workforce strength and skill, and political and economic events.

Using Technology to Mitigate Risk

Enterprise risk management profiles are rising such that they need to evolve to become an integral part of the financial institution’s business. A siloed, middle-office approach no longer works. Robust risk management is now key to strategic decision making. Technology can prove to be the saviour in this scenario, eliminating bias from risk assessment and improving risk management.

In fact, 70% of Risk and Compliance (R&C) domain experts agree that technical tools are much more reliable for decision-making, risk analysis and performance monitoring. However, 62% of these experts also agreed that the top challenge is transitioning from manual to data-driven processes.

The need of the hour is streamlined enterprise risk management processes integrable within the business ecosystem to deliver an organisation-wide overview of risks. But in-house IT teams are already too stretched to take on the additional responsibility of running, maintaining and periodically upgrading risk management systems. Under such circumstances, the most viable option is to outsource risk management in the form of a managed service, freeing up the resources of the financial institution to focus on its core competencies.

Risk As A Service

Risk as a Service (RaaS) can help with the seamless integration of real-time risk management technology with the analytics derived from market data to enable informed decisions. RaaS offers multiple benefits for the finance sector, such as:

1.Minimising Time to Market

Development of a new technological framework is capital-intensive, costing expertise and time. On the other hand, third-party services are quick to integrate, exhaustively tested and ready to be deployed at a fraction of the cost and time.

2. Access to Proficiency

With third-party tools, organisations can access expertise that helps them stand out in the increasingly competitive market. It gives access to innovative and business-critical applications created by experts.

3. Deeper Analytical Insights

Application of AI/ML-based algorithms helps to break down complex data sets to provide deep insights from internal, external and industrial data. These insights can help to devise better risk management models.

4. Stay Focussed

With RaaS, organisational resources, in terms of manpower and budget, can be better used for high-value business development activities.

An RaaS provider is equipped to deliver value through effective risk analysis reports and management models, helping organisations not just survive but thrive in a rapidly changing industry. Partner with an enterprise risk management solutions provider with a global footprint and an established track record of providing compliant services across jurisdictions. Their highly experienced and award-winning team can support you at every stage of the process, from identifying risks to eliminating them.

Kiran Surve, CEO, CARE Risk Solutions adds:

"Risk as a Service (RAAS) is non-negotiable for Financial Institutes looking to grow in a fast evolving dynamic Regulatory & Compliance (R&C) environment. Third party players, due to their focus and expertise offer real time advocacy, and keep partners on the right track. At CARE Risk, we offer this expertise through a mix of pertinent products, consultancy and AI&ML enabled analytical tools."