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Risk Management

5 Ways to Show Your Files Some Love—and Better Manage Risk

September 22, 2020 | Posted by Michael Berman
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6 Minute Read

Today we’re talking about a topic near and dear to every banker’s heart: files.

Bankers have a lot of files—and a lot of accountability. Files document data, actions, and authorizations, creating a much-needed audit trail. The problem is that not everyone has the same style of file management and that leads to a lot of confusion.

 

Do you recognize yourself or your coworkers among these file styles:

  • The alphabetized/color coded filer. You are a master of organization, but not everyone shares your passion for having a place for everything and putting everything in its place. You’re frequently frustrated that others won’t adopt your meticulous system.
  • Organized chaos. You have a system that makes perfect sense—to you. No one else can make heads or tails of it, but you can (almost) always find what you’re looking for.
  • The casual archivist. Sometimes you store your documents exactly where they should go. Other times, you’re loosey-goosey. Your signature move is downloading a file from the intranet and not uploading the most current version when you’re done making changes.
  • The renegade. You get it done and move on. You’re not sure where you put it or why, but if you dig around in your sent emails long enough, you’re bound to find it.
  • The paper lover. You print out a hard copy of everything (and bemoan the death of old-school library card catalogs). Binders are your best friend, and you’re quickly running out of room in your office.

The problem with different file styles is that more than one person needs to access a file. In some cases, numerous departments, or even the whole financial institution needs access to a file. Without agreement on how to handle files, it’s easy for them to get lost or overlooked. And let’s not even get started around the struggle to prepare for audit or exam time.

It doesn’t have to be this way. In honor of National Love Your Files Week (September 21-25), we’re sharing our top five tips for making file management simpler and more efficient so you can better manage risk.

  1. Centralize those files. All your files for a function, whether it’s risk management, vendor management, business continuity, compliance, or audit, should be stored in one place—and I don’t mean the shared drive. The problem with the shared drive is it can result in:
      • Multiple versions of a file. Centralized storage means never wondering if you’re using the most current version of a document. Documents are often downloaded and then saved to an individual hard drive, creating multiple copies with miscellaneous updates instead of one master file. These manual processes leave room for error.
      • Lack of visibility. Different employees many be maintaining their own files, which may or may not be regularly updated.
      • No file tracking. What was changed, when, and by who? There’s no audit trail.

Centralizing files ensures that everyone is working with the same information all the time by centralizing documents.


  1. Standardize files for better data. Is every department or branch using its own version of a form? It’s an issue that goes way beyond a simple form. It may be causing different departments to use different or even conflicting approaches for the same task. For instance, each business area might use a different approach for risk management. Without standardization, relationship owners often develop their own approach to assessing vendor criticality that might not align with the FI’s risk tolerance. They create their own scales for evaluating critical/significant/high-risk vendors.

    It also ties into centralization again. If the results of risk assessments aren’t kept in a centralized location, business areas won’t know when a risk assessment has already been conducted, causing them to re-do work that has already been done.

  2. Define retention policies. How long are you going to hold on to a file? Whether it’s a small business loan application, a consumer complaint, a third-party vendor contract, or a risk assessment, have policies outlining how long different files should be retained. Safely dispose of unneeded files to improve overall organization.

  3. Have a way to track files. It’s easy to see who last edited a spreadsheet on a shared drive. It’s not easy to see exactly what changes were made. There’s no log of who recorded what and when. It’s a tracking nightmare. When seeking out solutions, make sure it has file-tracking capabilities allowing it to automatically track all activity by the user so it’s easy to create an audit trail showing who is responsible and where they are in the process. 

  4. Seek out solutions that simplify file management and leverage the information contained in them. Leverage software for tracking and analysis.  The right partner can help you centralize and organize your documents, following them from initiation to completion and provide meaningful analysis and dashboard reports. It can also send automated reminders and notifications to ensure files are kept up-to-date without having to set a bunch of email reminders.

Want to know how one risk manager overcame the problems of manual processes? Uncover her secrets: The Life of a Strategic Risk Manager: The Problem of Manual Processes

Michael Berman

Michael Berman

Michael Berman is the founder and CEO of Ncontracts, a leading provider of risk management solutions. His extensive background in legal and regulatory matters has afforded him unique insights into solving operational risk management challenges and drives Ncontracts’ mission to efficiently and effectively manage operational risk.