Risk management has become one of the most important undertakings that organizations face on a daily basis.
The increasing complexity of business, globalization, and the growing sophistication of financial crime make it essential to manage threats to protect your organization from potential damage or financial loss.
No surprise, then, that 79% of financial and commercial institutions say their priority for 2023 is to improve the quality, availability and timeliness of risk data. Fortunately, there are tools and processes that can do the job.
Your organization can get ahead of any vulnerabilities that arise, allowing you to identify and mitigate potential threats in the short, medium, and long term. Here are six useful tools you can use right now to start building the fences that will protect your business. Ready to get started? Let’s get to work!
Top 6 leading solutions for managing business risks
1. KYC verification
KYC checks are mandatory for nearly all companies, particularly those providing financial products or services. However, beyond simply fulfilling regulatory requirements, implementing these measures can offer significant benefits to your business.
KYC involves verifying customer identity and assessing potential fraud and money laundering risks. To safeguard your business, the following steps can be taken to properly implement it:
- Develop a robust policy outlining the necessary documentation for account opening: information to be collected from customers, and methods for identity verification
- Conduct background checks to identify potential risks: which may include scrutinizing criminal records, credit history, and individual standing.
- Make use of technological tools: such as online databases and identity verification services
- Provide constant education to employees on KYC policies and procedures: to ensure consistency and facilitate the identification and reporting of potential risks. Human oversight is essential.
- Continuously track customer transactions and activities: to detect suspicious behavior. This involves reviewing unusual or high-value transactions and identifying irregular patterns
By implementing KYC compliance, you can safeguard your business, minimize the risk of fraud and money laundering, ensure compliance, and protect your reputation.
Ultimately, these measures will contribute to a cleaner, safer, and more secure business environment. Many businesses have no idea of the scope of KYC processing, so you’ll start with a step up.
2. Insurance policy handling
Managing insurance policies can be a complex and tedious process for risk managers, who often struggle to access the information they need about coverages and clauses.
They are often faced with the difficulty of locating policy information, which can take a great deal of time and effort. The search may involve going through paper files, searching on the computer, or contacting the broker or insurer to obtain the information.
This can make it difficult to answer even simple questions about coverage or provide proof of coverage in the event of a claim. You must remember that your property coverage policy is your main protection and you should be aware of and have easy access to its terms at all times.
However, a policy management tool can simplify this process. This tool allows you to:
- Consolidate all policies in one place
- Consistent spreadsheets that can be sorted by layers, limits, deductibles, carriers, and more
- Policy erosion and counterparty risk visibility: so you can monitor the status of policies and programs at all times
You can quickly identify claims that could push your business to the breaking point and take preventative action to increase efficiency and drive growth. The idea is to make informed decisions and act quickly in the event of a claim.
3. Claims processing and handling
Claims management can be tricky by the different systems used by insurers and administrators outside your company. This can make it difficult to track ongoing claims and hold the right party accountable. Fortunately, a claims management tool centralizes:
- Claims data: providing detailed analysis from initial submission to final settlement. This ensures efficient and cost-effective claims management
- Valuable information about payments and reserves
- Comparison of similar claims and potential claim outcomes
Instead of dealing with multiple systems and losing important information, one claims management tool provides detailed analysis and visibility across the entire cycle. It’s possible to have internal control over submitted claims, and external administrators have useful information to assist you.
One of the best cybersecurity tips for a business is to regulate its demands, potential threats that are entirely internal. Once you’ve easy access to your policies and an internal incident management system in place, let’s move on to the proper revaluation of those coverages.
4. Policy renewal coverage recalculation
Renewing property insurance is another important step. Gathering information on loss exposure is often a cumbersome task, but an exposure management tool can provide good insight.
It automates the collection of renewal information, reducing the burden on risk managers. The tool ensures:
- Consistency and accuracy of data by entering it into easy-to-use screens.
- Sends email reminders to the responsible person in case of incomplete or missing information
- Provides periodic reports with descriptive information about submitted data and flags unexpected values for further investigation
Consolidated data shows important changes and trends from one year to the next, and reports are generated with a single click, enabling faster, more accurate decisions. The quality of the data can also help in premium renewal negotiations.
Policy renewal coverage is an often overlooked task within incident management, but don’t lose sight of it. If you can automate the process of gathering information for renewal, you will have the ideal coverage.
5. Event and cause analysis
Preventing and effectively managing the root cause of incidents is another essential aspect of protecting your organization’s reputation and finances, thereby minimizing risk. Sometimes in order to move forward you have to revisit the historical records over and over again.
Root cause analysis is the key to preventing future problems. Event and cause technology enables:
- Deliver information directly to those who can investigate and act, so that accurate data is captured for each incident and accurate information is quickly delivered to the investigation team
- Helps identify underlying problems so the team can implement security measures to prevent future risks
With a root cause analysis tool, you can identify and address underlying and real problems. There is no point in preventing incidents if you only deal with them when they occur and have no system in place to plan ahead. This is what we mean by managing risk, not avoiding it.
6. Automatic assignment of premiums
Allocating premiums is important for management motivation and proper risk budget management.
Some companies choose to share the total cost without properly allocating it. However, holding managers accountable for their losses can motivate them to prioritize important initiatives such as return to work and safety.
This can be especially difficult if your company is multinational and has multiple business units, but an automated tool can integrate relevant data and provide tailored solutions based on actual experience:
- By forecasting different allocation scenarios: the best overall outcome can be determined and formulas can be saved for future years
- With a reliable and accurate structure: premium allocation dramatically increases its credibility and efficiency
Allocation can be a challenge, yes, but this tool is one of the most efficient field management service programs available and can provide custom solutions and increase premium allocation efficiency.
6 small shifts with big long-term impact
There is no question that effective enterprise risk management is critical to the success and longevity of your business. The solutions mentioned above will do the work, such as:
- KYC verification: a way to verify customer identity and assess potential fraud and money laundering risks that can protect your business
- General insurance policy management: can simplify the process of searching for information on coverages and policy clauses and to have this information available at any time or place
- Claims handling and management: centralizes claims data and provides detailed analysis from initial submission to final settlement
- Policy renewal recalculation: automates the collection of renewal information, reducing the burden on risk managers
- Cause and effect analysis: to think forward, you need to think backward to the variables that directly cause each claim or incident
- Premium allocation: with a reliable and accurate structure, you can dramatically increase your credibility and effectiveness
These are ways to cover your back by automatically calculating vital information about what has happened, is happening, and may happen on your company’s property.
Investing in these solutions not only helps you comply with regulatory requirements, but also helps you protect your reputation and minimize monumental risks such as money laundering.
It’s about making truly informed decisions and acting quickly in the event of a loss, which is essential for the long-term survival of your project. Ready for a 2023 of growth, not loss? Start by acquiring these essential systems for your business.
Author’s Bio: Guillermo is a Venezuelan SEO content writer currently living between Uruguay and Argentina. He is currently a head content writer for Skale. His articles have reached more than two million people across the Americas. He is a firm believer in love, dulce de leche and Kelly Clarkson.