By Shankar Bhaskaran, Managing Director – India, MetricStream
Ensuring effective Governance, Risk, and Compliance (GRC) practices has become more critical than ever for modern businesses. As per PwC’s Global Risk Survey, cyber risks have emerged as the top threat for Indian organisations, with 38% feeling highly or extremely exposed, followed by climate change (37%) and inflation (36%).
So, as companies in India and across the globe face mounting pressure to navigate expanding GRC complexities, many are turning to automation to improve the efficiency of their GRC programs.
Understanding GRC automation
Governance, Risk, and Compliance are the three pillars forming a structured framework to ensure that a company’s overall processes are streamlined, consistent, and in line with regulatory requirements, internal policies, and risk management strategies. Automating GRC is all about using smart, technology-driven solutions to optimise processes such as risk assessments, compliance monitoring, regulatory reporting, and internal audits, reducing the reliance on manual efforts.
Using advanced technologies like artificial intelligence and machine learning, GRC automation tools are taking decision-making to the next level while mitigating risks. These tools result in a more unified strategy that enables organisations to manage governance, assess risks, and ensure compliance seamlessly by replacing siloed, manual, and time-consuming tasks.
Need for GRC automation in the current risk landscape
Recent business trends across the globe have highlighted the growing importance of embracing automation in GRC.
In the United States, businesses need to meet the challenge of a fast-evolving regulatory landscape as the Securities and Exchange Commission (SEC) tightens regulations and stresses the need for strong internal controls and risk management. Meanwhile, companies in the UK and Europe need to comply with new regulatory challenges post-Brexit, requiring agile GRC processes. As for India, a recent research paper by a regulatory compliance management firm found that businesses need to navigate 1,536 Acts and rules, 69,233 compliance requirements, and 6,618 annual filings to stay compliant!
As the business landscape evolves, the rise of Generative AI gives organisations more automation opportunities while introducing new challenges like data privacy and governance issues. With thousands of users in an organisation gaining access to these advanced AI tools, what measures must be implemented to ensure compliance with the company’s legal framework?
Governance goes beyond mere compliance with current norms. It must also anticipate and plan for future changes in the changing landscape. Automating GRC processes lets business leaders accurately track internal and external changes, make more time-bound and informed decisions by analysing patterns, and position their company for success and stability.
Advantages of GRC automation
The business scenario is constantly changing, and regulatory requirements are becoming more complex. Organisations must navigate the challenge of staying compliant while managing intricate governance structures and effectively addressing risks.
Here are a few key benefits of automating GRC processes:
Better accuracy: Automating GRC processes minimises manual data handling considerably, reducing the risk of human errors to a great extent. Automated workflows ensure consistent data collection, analysis, and reporting, resulting in more accurate and reliable outcomes.
Real-time tabs: Automation paves the way for continuous, real-time compliance status and risk exposure monitoring. This proactive approach means organisations can address issues faster while implementing corrective measures, thereby minimising the impact of potential risks.
Data-backed decisions: GRC automation uses advanced analytics to give actionable insights. This means decision-makers are armed with comprehensive data, enabling them to make more well-informed decisions that align with business objectives and regulatory standards.
Maximum use of resources: GRC tools free up valuable human resources by automating routine tasks. The result? Skilled professionals can dedicate their time to strategic initiatives and add greater value to the organisation.
Adapting to regulatory changes: With regulations constantly evolving, organisations must be agile in their compliance efforts. GRC automation tools are designed to be flexible, allowing organisations to quickly adjust their processes in response to changing regulatory requirements.
Key considerations when automating GRC processes
Engaging stakeholders
To ensure the success of GRC automation, it is necessary to start by identifying key stakeholders—technology officers, implementation partners, end-users, and Chief Risk and Compliance Officers. Understanding their roles helps map out who controls what. Workshops and interviews can bring more clarity to relationships and dependencies. The result is more collaboration across IT, risk management, and compliance teams.
Drawing out a clear automation roadmap
Setting up GRC automation requires a well-defined roadmap. This means it is essential to outline major milestones, create a detailed program management plan, and assign responsibilities. This process involves commitment from senior leadership, cultural shifts, and using technology to build a robust, long-term solution.
Choosing the right solution
Selecting a GRC automation tool requires understanding both technical and cultural needs. Consider factors like the vendor’s industry experience, integration capabilities, learning curve, and support. Assess the tool’s flexibility, data security measures, and the vendor’s approach to projects and end-user training. Pilot testing can also help smoothen out integration challenges.
Preparing for risks
A comprehensive risk assessment is essential for identifying potential pitfalls in GRC automation. Collaborate with risk management experts and legal advisors to create contingency plans. Implement proactive monitoring mechanisms like regular audits and automated alerts to catch issues early.
Conducting user training
A robust user training program must be designed with input from training professionals and subject matter experts. Tailor the training to the needs of key users in each department and provide ongoing support through a dedicated helpdesk. Ensure continuous learning with up-to-date resources, on-demand training videos, and in-app AI chatbots to enhance user experience and ROI.
Making the most of AI
Generative AI can improve user training and reporting capabilities, so it’s essential to harness it. Consider integrating AI-driven tools to streamline interactions with data and provide advanced analytics and conversational interfaces for a more intuitive experience.
Parting thoughts
Embracing GRC automation helps organisations optimise their operations, handle risks better, and easily tackle compliance requirements. Sure, there might be some challenges along the way, but the payoff will be well worth it in the long term.
