Collaboration is essential to achieving a productive and outcome-focused business, particularly when it comes to innovating risk management. The innovation of risk requires the amalgamation of ideas from a diverse set of skill sets, given the complex and diverse nature of subject matter experts (SMEs) across risk and compliance.
This diversity is critical in helping us “connect the dots” and identify innovative solutions to complex challenges. For example, when it comes to Anti-Money Laundering and the “Know Your Customer (KYC)” process, we must tap into the expertise of operational risk, compliance (AML, Privacy, and Legal), fraud, and credit risk to find innovative solutions.
By fostering collaboration and embracing diversity, we can unlock new and creative solutions to manage risks effectively and drive business success.
Value of Collaboration
One of the biggest challenges in risk and compliance management is demonstrating tangible financial benefits. Unlike other business areas, such as sales or marketing, where return on investment (ROI) can be more easily measured, the benefits of investing in risk and compliance management are often intangible and difficult to quantify.
In many cases, the value of effective risk and compliance management may not be realized until something goes wrong. For example, the cost of a data breach or a regulatory fine can be significant, and may far outweigh the cost of implementing adequate risk and compliance controls. However, it can be challenging to convince stakeholders to invest in these controls upfront, particularly if they do not see immediate financial returns.
Moreover, risk and compliance are often viewed as a necessary evil or a cost center, rather than as strategic enablers of business success. This perception can make it challenging to secure budget and resources for risk and compliance initiatives.
Business Benefit
Collaboration has been consistently shown to lead to better, more robust, and innovative solutions. However, when it comes to risk and compliance, it can be difficult to demonstrate direct financial benefits.
So what benefit does collaboration in risk and compliance provide?
Bringing together subject matter expertise of risk and compliance supports better business decisions. In essence, it increases the chance that all outcomes are considered. This is however hard to quantify, as you are quantifying what could happen, not what did happen.
Take the recent article on the “over-reaction to COVID-19“. This virus and the global response was, and is, complex. Looking back on things from today’s perspective, it can appear ‘easy to predict’ things differently. However, decisions were made with an unknown future of different risks and different outcomes. Predicting today, what it could have looked like is naive and dangerous.
The benefit of considering the bigger picture of risk and compliance is that it allows us to move forward with a clearer understanding of potential risks and outcomes. While the financial benefits of collaboration may not be immediately apparent, taking a collaborative approach can help organisations make more informed decisions and mitigate risks more effectively in the long run.
The benefit of considering the holistic picture of risk and compliance enables us to move forward with ‘eyes wide open’.
5 Reasons Why the Innovation of Risk Requires Collaboration
Collaboration is essential for the innovation of risk, and there are five key reasons why:
- Different experiences and backgrounds: When individuals with different experiences and backgrounds come together, they bring unique perspectives to the table. This can lead to more innovative and well-rounded solutions.
- Real-time sharing of ideas: Collaboration allows for the real-time sharing of ideas and discussion of these ideas. This can lead to more efficient problem-solving and decision-making.
- Continuous improvement: Collaboration allows for ideas to be continuously recorded, amended, reflected upon, reviewed, and enhanced. This can lead to better outcomes over time.
- Embracing diversity: Collaboration enables individuals with different styles of interaction and behaviors, such as introverts and extroverts, or those from different generations, to work together effectively.
- Linking to factual information: Collaboration ensures that decision-making is linked to factual information, leading to more informed and well-considered decisions.
While these reasons for collaboration may seem simple, not everyone recognises the importance of collaboration in a risk and compliance context. This may be due to individuals’ desire to maintain information as a protectionist mechanism.
Sharing Information is the Real Power
There’s an old saying that “information is power”, but history has shown us time and time again that this approach often leads to worse outcomes. In reality, the most valuable employees are those who freely communicate and share information, without being concerned about job security or career advancement. They understand that knowledge-sharing leads to the best possible working environment and ultimately delivers the best business outcomes.
As we highlighted in another article, these employees are passionate about making ‘every moment matter‘. They’re committed to creating a culture of collaboration and openness, where everyone feels valued and encouraged to contribute their ideas and expertise. By fostering this type of environment, organisations can drive innovation, improve performance and achieve their strategic goals.
In Summary
Collaboration in the innovation of risk is essential for success. When individuals come together to share their experiences and ideas, they can create more robust and innovative solutions. It enables a diverse set of skill sets to work together and share real-time discussions, allowing for the constant refinement of ideas. Collaborating with subject matter experts across risk and compliance ensures that all outcomes are considered, increasing the chance of better business decisions.
Innovation in risk and compliance is a challenging area, and it is difficult to show tangible financial benefits. However, by collaborating, we can move forward with ‘eyes wide open’ and ensure that we are considering the holistic picture of risk and compliance. This approach provides an opportunity for continuous learning, improvement, and growth.
As a risk professional, I have seen the benefits of collaboration firsthand. I have worked with individuals from different backgrounds, skill sets, and locations, and together we have achieved better outcomes than we could have alone. Collaboration has enabled us to think outside the box, challenge assumptions, and develop innovative solutions that have delivered value to the organisation.
In summary, collaboration is essential for the innovation of risk, and it is the most important thing each of us can do. It allows for the sharing of information and ideas, encourages diversity and innovation, and ensures that all outcomes are considered. As a risk professional, I believe that collaboration is critical to achieving success in the ever-changing risk landscape.
