What Is Risk Analytics and How Is It Used in Risk Management?
Now more than ever, we operate in extraordinary uncertainty with the convergence of cyber risks, artificial intelligence, global economic shifts, and a robust technology transformation disrupting the business environment. Organizations cannot afford to reactively find solutions. To mitigate risks and anticipate potential exposure and loss, organizations need effective and timely ways to continuously monitor business operations and key risks through risk management analytics. With the right tools, organizations can proactively manage risks with improved precision and fewer resources. Well-designed risk analytics and automation helps organizations increase risk coverage, drive down cost and re-engineer risk management programs in a cost-effective manner.
Experiencing the Difference of Integrated Risk Analytics Data Science
As part of Cherry Bekaert’s broader suite of risk analytics tools and solutions, we offer a methodology powered by an integrated set of technology tools to derive risk likelihoods from ordinary business transactions. The result of this comprehensive risk assessment analysis approach provides visualization dashboards highlighting areas of concern and subsequent actions such as monitoring, remediation, and escalations as set by policy and procedures. The toolset spotlights areas of concern relative to an organization’s risk appetite and tolerances in a three-phased risk analytics approach:
Data Integration and Curation
Data discovery and identification, sourcing and extraction, cleansing, mapping, and aggregation for sustainable data integrity
Rules-Based Risk Identification and Processing
Apply targeted tests from our Risk Catalog and configure input parameters, such as, tolerances, proxies, materiality amounts and assumptions
Publish test results in dashboards and trigger downstream reporting and remediation workflows
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Benefits of Our Unique Approach to Risk Analytics Consulting
We help organizations protect value, power performance, and build resilience using purpose-built risk management analytics solutions that can help transform business processes by:
- Implementing risk assessment controls for prioritizing testing frequency and depth of monitoring.
- Introducing monitorable controls with risk event flagging for remediation and escalations.
- Establishing continuous monitoring capability built on structured processes, standardized rule sets, and integrated technology.
- Utilizing results to assess new risks, re-assess existing risks, and/or improve existing controls.
Our risk and data analytics methodology helps mature risk governance by establishing continuous monitoring of day-to-day activities by:
- Increasing audit effectiveness across the various risk domains, operational, financial, compliance and fraud
- Broadening audit coverage from sampling to all transactions
- Optimizing audit resourcing
Technology and Data Enablement
Risk and control environments are transforming for a variety of reasons: regulatory compliance changes, environmental changes, digitally-driven economic climate, technology enhancements, and changes in the way customers buy and do business both domestically and around the world. Cherry Bekaert has strategic alliances with several Governance, Risk, and Compliance (“GRC”) software providers to assist companies with strategy, documentation, vendor selection and validation and a proprietary roadmap for implementation.
How We Can Help
Cherry Bekaert’s Risk Advisory Services practice is comprised of experienced professionals in the development, management and execution of risk management services including operations, the assessment and control and process development. Our practice is focused on helping organizations implement advanced analytics and automation solutions designed to monitor risks and enhance the quality and speed of an organization’s decision-making effectively and efficiently.
Risk Analytics Examples: Client Success Stories
Success Story: Developing Data-Driven Solutions and Toolsets to Augment a Manual Process
A County Library System with over 500,000 card holders across 19 locations and over 1.2 million titles in circulation serves as the community technology connector, early literacy hub, and center for skills development. Yet, their data was buried in manual processes and spreadsheets rendering the Library System labor-intensive, inefficient, and prone to reporting errors.
Our Risk Analytics Solution:
Cherry Bekaert defined key performance indicators, cleaned and prepped the Library System’s data building interactive dashboards for staff to visualize and interact with in real-time. Leveraging the interactive dashboards, the Library System was able to make enhancements to their circulation and community outreach efforts. Reports were streamlined, automated and precise data-points were used for resource planning and circulation allocation. This strengthened the library’s internal controls over reporting while freeing up staff to better serve the community.
Success Story: Enhancing and Protecting Transaction Monitoring for Procurement Card Program
A government authority with over 90 sites and more than 5,500 workers needed to enhance their procurement card oversight program. It operated in a random untargeted mode in its effort to identify risks from fraud, waste, and/or abuse. Its oversight methods were labor hour intensive having limited coverage to meaningfully identify transactional anomalies.
Our Risk Analytics Solution:
Cherry Bekaert was able to enhance program oversight and drive effective and more frequent monitoring by utilizing a fit for purpose, rules-based approach to procurement card monitoring derived from industry accepted risk identification methods. Our execution comprised of the following:
- Provided a facility to learn about cross-functional spending behavior and delineated spending bands to identify normal vs. outlier spending.
- Prioritized management’s objectives to scope the suite of tests, such as, split transactions, cash-convertible goods (e.g., gift cards), post termination activities, and non-business day activities
- Initiated data discovery to assess data availability, integrity, and consumability to optimize scoped test coverage
- Utilized data wrangling to cleanse and prepare disparate data sources, including ERP, HR, Card Provider, and third-party vendor sources for use in analytical tests
As a result, the entity enhanced their monitoring capability, reduce labor hours, achieved a more comprehensive and frequent approach to risk identification.
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