Season 2 | Ep. 30: Driving Change in Risk Management: Insights from the Field

In the ever-evolving landscape of financial risk management, the ability to accurately assess and manage risk is paramount. This episode of the Risk Intel Podcast, hosted by Ed Vincent sheds light on the transformative power of risk maturity self-assessments in building robust risk management programs. Our guest Niki White, Chief Growth Officer at SRA Watchtower, delves into the nuances of self-guided risk maturity frameworks and how they can help financial institutions achieve internal buy-in for their risk programs.

The Role of Self-Assessments in Risk Management

Understanding the Self-Guided Risk Maturity Framework

Niki White’s extensive fieldwork with risk officers at various financial institutions has provided her with unique insights into the efficacy of self-guided risk assessments. Unlike traditional external gap analyses, which often leave clients with a static report, self-assessments involve a more collaborative approach. Financial institutions are given a framework to evaluate their own risk maturity, with SRA Watchtower acting as a partner in the process.

This self-assessment method allows risk managers to take a closer look at their processes, identify areas for improvement, and understand what "good" looks like in their specific context. When an external partner or risk expert can ride along side a customer going through this process, they can help challenge assumptions, ask probing questions, and provide industry-wide perspectives, ensuring a thorough and honest evaluation.

Client Reactions: Embracing the Self-Assessment Approach

The feedback from clients has been overwhelmingly positive. Many risk managers appreciate the opportunity to reassess their maturity levels and identify gaps they might have overlooked. The self-assessment process encourages a more open and introspective approach, enabling institutions to recognize their true position and set realistic goals for improvement.

Niki shares that the collaborative nature of the self-assessment helps institutions create a custom roadmap tailored to their unique needs. This roadmap not only addresses current gaps, but also provides a clear action plan for continuous improvement over the next 12, 24, or 36 months.

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Comparing Self-Assessments with Traditional External Assessments

The Limitations of Traditional Gap Analyses

Traditional gap analyses conducted by external consultants can provide helpful insights, but they often fall short in terms of actionable outcomes. These assessments typically involve a large consulting firm evaluating the institution’s policies and procedures and delivering a templated PDF report based on their outside perspective. While useful, this approach can leave clients struggling to understand the full context of the report and how to even implement the suggested changes once the consultants are long gone.

The Advantages of a Self-Assessment Tool

In contrast, a self-assessment approach involves clients deeply in the evaluation process. Niki and her team has guided close to 100 financial institutions using the RMA's Risk Maturity Framework, Powered by SRA Watchtower tool today. These institutions can perform their own assessments, interpret the results, and set achievable long-term goals. This method ensures that the assessment is tailored to the institution’s unique circumstances and needs.

The tool allows clients to track their progress over time, making incremental improvements and adjusting their action plans as they go. This iterative process helps institutions build a more mature and resilient risk management program.

“They [risk leaders] can then create their own action plan of what they’re going to do and over what time frame” – Niki White

For more insights and personalized guidance, contact Niki White here to start your journey towards a more mature and resilient risk management program.

Leveraging External Perspectives and Data

Niki later in the episode emphasizes the importance of having an external perspective, whether it’s through a self-assessment or a traditional gap analysis. Fresh perspectives can help new risk officers gain credibility and drive change, while long-tenured professionals can benefit from an external viewpoint to ensure they haven’t become complacent.

In addition, Niki explains how data plays a crucial role in making a compelling business case for risk management investment. Watchtower’s ERM self-assessment tool provides access to industry benchmarks and peer data, allowing institutions to compare their performance against others. This data-driven approach helps risk leaders substantiate their positions and advocate for the necessary resources and changes.

Navigating Internal Challenges

Overcoming Internal Resistance

Risk leaders often face internal resistance due to budget constraints and competing priorities. Niki discusses the common challenge of securing internal buy-in for risk management initiatives. By utilizing data from the self-assessment tool, risk leaders can demonstrate how their institution compares to peers and regulatory benchmarks, making a stronger case for investment.

Creating a Culture of Continuous Improvement

The self-assessment process not only helps identify current gaps, but also fosters a culture of continuous improvement. Institutions can set incremental goals, monitor their progress, and adjust their action plans overtime. This approach ensures that risk management programs evolve and improve in response to changing circumstances and new challenges.

Conclusion: Embracing the Power of Self-Assessments

This episode of the Risk Intel Podcast with Ed Vincent and Niki White highlight the transformative potential of self-assessments in risk management. By involving clients deeply in the evaluation process and leveraging data-driven insights, financial institutions can build robust and adaptable risk management programs.

If you are looking to improve your institution's risk maturity and struggle to secure internal buy-in for your risk management program, learn more about the ERM Risk Maturity Assessment tool or contact Niki today.

"Embrace the self-assessment process to unlock your institution’s full potential in risk management"