Financial institutions are constantly looking for new and better controls to mitigate risk. It’s a task that requires creativity—and a willingness to look at tools not just for their intended use but how they can contribute to risk management.
Consider employee intranet and board portal solutions. Banks, credit unions, mortgage companies, and other financial institutions use these products to ensure employees and directors have secure access to the most up-to-date version of policies, procedures, reports, and other important documents. It streamlines communication throughout the organization.
They can also serve as useful risk management controls when used correctly. Here are four key areas where financial institutions can reduce risk by using board and employee portal solutions:
- Operational risk
Operational risk is the risk of financial loss when processes, people, or systems fail. These failures often occur when staff doesn’t have the correct information. For example, without access to the most accurate product and pricing information, employees can misprice products—leaving revenue on the table or creating the potential for expensive fair lending issues if the pricing errors unintentionally lead to discrimination. Having one single updated, reliable source for pricing information and other policy and procedure documents helps ensure all staff are working from the same data.
- Compliance risk
Managing compliance risk isn’t just the job of the compliance department. Everyone at the institution has a role to play—and they need to stay on top of their evolving roles. As new laws and regulations are written, institutions must adjust their policies and procedures to keep up and employees must be made aware of them. An employee intranet can be an effective tool for lowering compliance risk.
Want to make sure everyone receives and reviews relevant policies and procedures? An employee intranet is the perfect place. Not only does it make it easy for HR to disseminate policy and procedure changes, HR can also ensure those changes are electronically reviewed and accepted by all personnel—creating a valuable audit trail. Training materials can also be posted and their viewing tracked.
- Business continuity
Whether it’s a natural disaster, cyberattack, or a pandemic, employee intranets and board portals can help ensure business continuity plans are accessible to all and facilitate communication.
It’s a lesson made clear by the COVID-19 pandemic, which forced the vast majority of financial institutions to activate at least some elements of their business continuity plans. Institutions with employee intranets were better able to ensure continuous, consistent operations because employees had access to policies and procedures, product and pricing information, training materials, blogs, company news, and other important information just as if they were in the office. They also had access to employee directories and profiles to help connect them with co-workers so they could continue to work effectively.
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- Strategic risk
Strategic risk is the possibility that a company doesn’t make decisions that support its long-term goals. This can happen when risks aren’t properly assessed, not enough thought and due diligence are put into new products, business lines or activities, or when the company undertakes an action that’s not consistent with the company’s goals or doesn’t provide the expected return on investment.
The board is responsible for setting strategy, making it essential that boards have all the necessary reports before their meetings so they have time to digest the information and consider how current levels of risk exposure align with strategic goals and the institution’s risk appetite. Board portals are ideal tools for delivering this information, making it possible to easily distribute last-minute updates and the latest information. They ensure that the board will always have the latest risk management insights available no matter where they are or what time it is.
Is your institution using every tool in its arsenal to manage and mitigate risk? When evaluating solutions for your institution, make sure you consider the impact that tool can have as a risk management control. Not only can it help you justify the return on investment, it can also make your institution safer.