6 Signs Your Financial Institution Might Need Risk Management Software

Software isn’t usually a silver bullet. But it can be a crucial ingredient in a successful cross-functional program. 

For example: adopting a new core from Fiserv, Q2, or Jack & Henry doesn’t automatically modernize your banking and lending experience. It would be great if it were that easy! 

What these cores — and any sort of technology — do is help you set a foundation. They become the central hub for all of your activities, and they use automation and smart tech to make life easier for your team and help you do your job better. 

Regional, and even intermediate small financial institutions can’t mess around when it comes to risk management. Outdated or inadequate risk management practices can lead to data breaches, hefty fines, reputational damage, and operational restrictions. 

In such a high-stakes game, why wouldn’t you invest in software that can help deliver peace of mind? Roughly 70% of banks are planning to either moderately or significantly increase their investment in integrated risk management platforms. 

Risk management software helps increase operational consistency over time and across functional areas. It reduces the dependency on any one person and streamlines the process of completing risk assessments. 

No matter the size of your financial institution, risk management software can set you up for success. Here are six signs that you might need a platform to empower your strategy: 

1. A regulatory exam didn’t go as well as you’d hoped. 

Regulatory exams can cover a lot of ground, from vendor risk management to IT compliance and beyond. If an examiner uncovers inadequate controls or risk management practices within your institution, it might be time to invest in a platform to help your team — and ensure that your next exam fosters more positive outcomes. 

This can be especially true for financial institutions that are still relying on manual methods to track their risk assessments. Sure, some spreadsheets are important for your FI’s operations. But relying solely on manual risk assessments can lead to human errors, data inaccuracy, poor visibility, and a lack of version control. 

2. You’re anticipating turnover in your risk group. 

Turnover is inevitable. Risk management software can provide guardrails in case of employee movement. 

If the people who oversee your risk assessments are nearing retirement or are candidates for roles in different departments, they might take critical institutional knowledge with them. Handing off homegrown spreadsheets is often painful — or even impossible. 

Software platforms reduce the dependence on specific individuals with historical knowledge. An integrated risk management platform will provide greater documentation and visibility into risk management practices. Automated alerts can help new employees stay up to date with the latest regulations. 

3. Business line leaders are concerned about the burden of risk assessment tasks. 

It’s possible that members of your financial institution’s lending or IT teams view annual risk work as a distraction from more strategic initiatives. They might be pleading for an easier way to satisfy risk requirements. 

Risk management software can help reduce mundane tasks (such as data entry) and streamline the completion of risk assessments. Best of all, if you select the right platform, there’s a good chance you won’t be compromising the quality of reporting. 

4. There’s been a shakeup in upper management. 

A new C-Suite executive or board member at your financial institution could prompt increased focus on regulatory and compliance measures. 

This is especially true if that individual comes with experience at a larger institution — where risk management programs tend to be larger and more robust. This new leader could advocate for more frequent or thorough assessments of threats, risks, and controls. 

5. Your C-Suite is emphasizing more robust risk management measures. 

Trending headlines can often force company leaders to re-evaluate their own risk management controls. Widespread incidents such as the CrowdStrike outage or National Public Data cyberattack might prompt more scrutiny and challenging questions from your C-Suite. 

Transitioning to a risk management platform can help provide an extra layer of security and control over your systems. This should give your leaders — and customers — more peace of mind. 

6. You’re approaching $1 billion or $10 billion in assets. 

As a small financial institution or community bank grows and matures, it will reach key thresholds that prompt more scrutiny from regulatory agencies. Agencies like the CFPB and the FDIC have chosen the $1 billion and $10 billion asset milestones as key inflection points for increased attention and expanded requirements. 

While your day-to-day activities likely won’t change much as you hit these milestones, you may find that processes that worked in the past are no longer suitable. Leaders will realize it’s time to mature their risk management programs – something software can help with. 

If your financial institution is facing any of these six challenges, it might be a good time to explore your options for an integrated risk management solution. 

It’s important to remember that simply choosing a platform isn’t enough; you’ll need to invest time in finding the right platform for you. You’ll want to select a platform that’s easy to onboard, automates routine risk management activities, and is backed by a reputable provider. The best software will be welcomed by top performers eager to do a great job. 

Operational risk management is serious business. If a software platform can help your institution stay up to date, what are you waiting for? Contact us today to learn more about WolfPAC Integrated Risk Management. 

More About WolfPAC: WolfPAC Integrated Risk Management® is a fully integrated suite of software and expert advisory services designed to make the hard work associated with risk management easier. Our low-friction platform keeps you one step ahead of emerging risks and ensures that regulators and executives are 100% satisfied with your reporting.