<img src="https://ws.zoominfo.com/pixel/pIUYSip8PKsGpxhxzC1V" width="1" height="1" style="display: none;">

What Is Risk Management?

author Ncontracts
2 min read
Nov 12, 2018

Every company is vulnerable to a certain amount of risk. These risks can stem from sources including financial uncertainty, legal liabilities, management errors, accidents, and natural disasters. IT security threats and data related risks can also be problematic, especially for digitized companies. Risk management works to identify risks and control threats at every level, helping institutions protect their capital and earnings.

Risk management is important for every company and is, in fact, such a crucial part of doing business that there are several industries and government bodies that have expanded regulatory compliance rules, carefully examining the plans, policies, and procedures adopted by most businesses. 

For instance, in banking, regulatory guidance can come from a number of different agencies, depending on the type and location of the financial institution. These banking regulators restrict certain activities, require others, and are designed to establish transparency between the bank and its customers.

Risk management is scrutinized by these industries and written up in reports that analyze risk management. To be sure they receive favorable reports, companies enforce their own methods including risk analysis, internal audits and other means of risk assessment.

The standards by which a company’s risk management is assessed has been developed by several organizations including the National Institute of Standards and Technology (ISO). These standards are updated regularly and are designed to help companies minimize risk when implemented into their organizational strategy and the way they run their business.

There are certain target areas or principles that should be incorporated into the overall risk management process. These include:

  • ability to create value for the organization

  • ability to be implemented into the organizational process

  • ability to be implemented into the decision-making process

  • ability to address any uncertainty

  • systematic and structured

  • based on the best existing information

  • tailored to the project

  • allow for any human error

  • transparent and all-inclusive

  • can be easily changed and improved if necessary

Following ISO standards is not mandatory, but it can help protect companies and prepare them in cases of internal or external risks audits. However, following regulatory guidance from the appropriate agencies in various areas of banking is required.

Because risk management is such an integral part of doing business, there may be times companies will need to bring in a third party to make sure they are compliant. In these cases, vendor management will want to make sure whoever is being brought in is familiar with all aspects of risk management as well as the needs of the company.

Complying with ISO risk management standards is not mandatory, but it can be an important step to take in keeping your company protected. Complying with regulatory guidance is not optional. Find out more about the steps you need to take to reduce risk and keep your institution in good standing.

Learn about risk mitigation and healthcare risk management software.

Subscribe to the Nsight Blog

All Topics Risk & Compliance Product Insight Banks Lending Compliance Credit Unions Risk Management Fair Lending Nfairlending Cluster: Risk Management Compliance Lending Compliance Management Integrated Risk Blog Regulatory Compliance Management Nrisk News & Updates HMDA Risk Mortgage Lenders Vendor Management Ncomply Business Resiliency CRA Lending Compliance Blog Vendor CFPB Ncontinuity Third-Party Vendor Management Business Continuity Cybersecurity Fintech NVendor Strategic Planning Ncyber Regulatory Updates Ntransmittal Audits & Findings Regulatory Compliance OCC Company Culture Audit Nverify Compliance Management Exams FDIC Nfindings Findings NCUA Contract Management Employee Intranet Business Continuity Management Contract FRB Findings Management Enterprise Risk Management FFIEC Ncontracts manager Third-Party Vendors Vendor Risk Artificial Intelligence Vendor Risk Management Wealth Management 1071 ABA Bank Access Control Audit Findings Board Portal Call Report Compliance Risk Cybersecurity Assessment Digital Tansformation Due Diligence Efficiency Employee Engagement Exam findings FIEC Governance and Risk Management Inc. 5000 Internal Audit Management Mortgage Lending Nboardportal Verify integrated risk management
Risk Management In Healthcare
Risk Management

Risk Management In Healthcare

Oct 31, 2018 2 min read
Risk Management Planning
Risk Management

Risk Management Planning

Oct 31, 2018 1 min read
Why Inertia Creates Risk
Risk Management

Why Inertia Creates Risk

Feb 2, 2017 3 min read