Operational Risk Management is a fundamental component of a bank’s risk management program. ServiceNow Operational Risk Management solutions strengthens this core module, which fosters greater customer loyalty and confidence in the relationship.

A growing number of high-profile operational loss events worldwide have increased the importance of ORM. The Basel Committee on Banking Supervision (BCBS) defines operational risk as the ‘risk of loss that results from insufficient or failed internal processes, people and systems or from external events.’ The committee has been refining regulations to strengthen the stability of the international banking system, placing significant emphasis on operational risk management.

Compared to financial risk, operational risk tends to be more complex. Understanding, measuring and managing interconnected factors including human behavior, organizational processes and the underlying technology is a huge challenge for banks. Many businesses struggle to support a risk culture with room for risk accountability. Agile operational risk infrastructures supported by technology are the need of the hour. Managing operational risk management programs on a mass of spreadsheets and a handful of point solutions doesn’t make the cut anymore.

Implementing resilient ORM strategies

Banks should access their existing risk factors and create a database, with all risk events mapped, to form effective ORM capabilities. Key Risk Indicators (KRIs) must be defined to give out early warning signs of any forthcoming problems. Banks must then clearly communicate their risk appetite. These are the steps to establish a bank’s cultural and governance priorities. Thus, the bank’s management will be able to set the foundation for a risk-aware culture with its behavior and decisions. The management can also create an observant work culture to predict and report any potential risk events by training the right staff to identify signs of potential events. This ensures that communication in case of risk happens top-down, bottom-up and across various departments.

With ServiceNow implementation, banks can leverage technology for continuous risk surveillance with the data available. KRIs defined using the available data can flag highly critical risks. This can be seen from a dashboard with different views for various levels in an organization to act upon. Channels for reporting risk events can be enabled through applications with user-friendly interfaces.

ServiceNow IRM for streamlined risk management

Enterprises without a holistic view of potential risks across all operations struggle to prioritize potential risk and quickly put in place remediation processes and establish control. ServiceNow IRM breaks organizational siloes and eliminates manual, inefficient processes to provide real-time integrated view of risk across the business. It covers all risk domains, including reputational risk, strategic risk, operational risk, compliance risk and financial risk.

ServiceNow Integrated Risk Management helps accelerate decisions by automatically assigning risk scores for better visibility with dashboards providing real-time insights. Now Mobile simplifies risk reporting across levels, allowing users to flag anomalies on-the-go. With automation and continuous monitoring, ServiceNow IRM makes compliance and testing easy and cuts down on potential service disruptions.

ServiceNow Integrated Risk Management solution comes with many features for operational risk management which enables

  • Evaluating risks using manual and automated risk assessments
  • Evaluating operational effectiveness of associated controls
  • Defining KRIs to highlight risks when the risk rating becomes unacceptable
  • Reporting and managing risk events to track identified risks and risks that are not present in the risk register
  • Aggregating risk reports for understanding losses at a higher-level using risk rollup
  • Analyzing risks across departments using consistent and common language
  • Creating issues automatically and tracking them to completion using remediation tasks

ServiceNow’s out-of-the box solutions for IRM ensure a quick implementation timeline allowing banks to focus more on managing operational risks. ServiceNow is committed to empowering users with up-to-date solutions and regularly releases new features and updates. Businesses can take risk management a step further with the comprehensive ServiceNow Governance, Risk, and Compliance module.

A Premier Partner of ServiceNow, Aspire Systems is proficient with all its modules and has completed more than 100 successful projects with the platform. Our team implemented ServiceNow ITSM for a leading US-based software provider, reducing their overall time consumption when it comes to tracking tickets by a third. Read the case study to know more.

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