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Shifting to a Holistic Risk Management Approach
October 8, 2018 Media, PA
Tech Insight
Operational Risk vs. Compliance Risk
There are countless types of risk. When risk management is discussed, most refer to the portfolio risk and if the organization’s financial decisions are leading to a potential loss. However, as mentioned, the list of what defines risk management is more in depth than what one may first assume. Two vastly important sectors of risk management are operational risk and compliance risk. These two segments of risk management are sometimes grouped together, but actually have significant differences that set them apart. Operational risk management refers to the exposures in the day to day operations of an organization. The exposures are often result from user error or a failure within the process. More so today, we can go as far to include data security and cyber security under the same category of operational risk management. On the other hand, compliance risk management is the exposure to fines resulting from the failure to meet regulatory requirements or standards that have been put in place. On the small scale this could be related to work place safety but can be as complex as the overall environmental impact of a decision. The vital importance of these two types or risk management is how quickly they can become overlooked or quickly spiral out of control without proper tools to monitor and manage them. At times, it may seem easier to pay small fines than take the time and resources to invest in ways to manage these types of risk. However, a small oversight has the potential to result in a catastrophic loss. Advanced Enterprise Technologies, Inc. are aware of the need for a simplified methodology for managing operational and compliance risk and have implemented the proper tools to mitigate these exposures.
What is Quadra™ and how it is helping companies integrate an ERM approach
Quadra™ is unique within the marketplace for a variety of reasons. The SaaS web application manages asset lifecycle plans and risk flawlessly. Quadra™ software features a streamlined, sensible user-interface and tools that display data from multiple angles. The latest addition to the software is a specific risk management module that allows users to easily search company and industry standards. As discussed previously, operational and compliance risk management are substantial parts of managing risk. Exposures that arise from the day to day functions of an organization could cost a company millions of dollars if one resulted in a loss. To support the enterprise risk management ideology, risk management needs to be the preeminent force of daily tasks for every member of the organization. Compliance is key, so having standards readily available for all users regardless of level of authority, creates an exceptional layer of mitigation.
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