Understanding An Active Risk Management Approach
Nov 11, 2021
Wondering how to launch an Active Risk Management strategy to leverage technology and manage your organization’s risk profile? You’re not alone. Today’s risk environment is incredibly complex and requires management that goes beyond traditional, siloed approaches for most companies.
With 58% of employees now working in a fully remote or hybrid capacity, we’ve seen the threat landscape rapidly expand. Integrated risk management solutions alongside an Active Risk Management strategy can help organizations empower employees to improve productivity, ultimate reduces claim costs costs in the face of these increasing threats.
What Is Active Risk Management?
An Active Risk Management approach is a set of practices and processes that can improve risk management decision-making and visibility. Active Risk Management acknowledges that every organization faces its own unique risk tolerance, and promotes a risk-centric rather than compliance-focused approach.
The rapid digital transformation of many organizations has led to an ever-expanding number of vulnerabilities for risk managers to contend with. You must now manage risk across the many departments within your own organization alongside external threats. Considering that risk management spend grew 6.4% in 2020, a comprehensive approach is critical.
With Active Risk Management, your teams can strategize, produce accurate assessments, reduce financial risks, and more effectively communicate to solve for risks like a security breach.
3 Key Components of An Active Risk Management Approach
What’s the secret to a successful, sustainable Active Risk Management strategy? You need organizational alignment and a strong understanding of your organization’s risk profile. The key steps in developing an Active Risk Management approach, regardless of the industry you work in, include:
Create a Risk-Aware Culture
A risk-aware workforce is critical to a strong Active Risk Management approach. All of your employees, from business leaders to workers in the field, need to buy into an organizational shift that recognizes the risks present across the organization. Consider ongoing training to coach employees, maintain security best practices, and promote collaboration across teams to mitigate these risks.
A comprehensive and integrated view across the organization is essential to understanding the full scope of risk. With an integrated approach, you can easily identify risks in connection with one another, rather than in silos.
Cross-functional visibility helps you monitor security across the business. For example, in the event of a breach, your team can immediately begin recovering with clear visibility into the infrastructure.
Implement An Active Risk Management Platform
To adopt an Active Risk Management strategy, you need to enable integrated technologies like a risk management platform. A more nimble alternative to an RMIS platform, this technology can improve decision-making and monitor capabilities.
With a risk management platform, you can align enterprise risk management practices with internal audit, compliance, and third-party risk mitigation. A single, automated platform with analytics and reporting functions can help you unlock visibility, optimize collaboration across departments, and minimize costly inefficiencies that are hurting your bottom line.
Improve Productivity With An Active Risk Management Approach
An Active Risk Management approach can help you create a risk-aware culture and free up resources for your team to focus on strategy, risk assessment, and innovative solutions while reducing your total cost of risk. Aclaimant’s risk management platform provides real-time solutions to the unique challenges and risk profile your organization is facing.