In a previous article, we saw that process mining can positively contribute to the planning and execution of an organization’s finance processes in four primary areas: working capital, productivity and reporting, but certainly also governance, risk and compliance (GRC).
Especially in the age of the AVG and strict national and international financial laws, being compliant is more important than ever. Fail to do so? Then skyrocketing fines and serious reputational damage are the possible consequences. In this article we take a closer look at governance, risk and compliance and show how process mining takes your GRC policy to the next level and contributes to better process compliance.
What is governance, risk and compliance (GRC)?
Governance, Risk and Compliance (GRC) is a structured way to align processes with business objectives while actively managing and controlling risk and complying with all industry and government regulations.
GRC falls into three parts:
- Governance. By this we mean the frameworks and policies aimed at managing and monitoring all your business activities.
- Risk management. This is a structured process for identifying, raising and mitigating risks according to established policy principles.
- Compliance involves assuring yourself that all activities and processes within your organization are compatible with the general and industry-specific laws and regulations with which you must comply.
Types of risk
But what kinds and types of risks do you all face as a financial services provider or organization with a large finance department? We briefly list the most important ones.
Digital risks
Digital risks occupy an increasing portion of the business risk spectrum in the age of information technology. Under this heading, we can include all risks related to the technical side of your IT environment. Examples include malfunctioning software and hardware, vulnerabilities within applications and dependence on technology that comes from third parties.
ESG-risico’s
Companies are increasingly being evaluated on their social face and sustainability policies. Preventing ESG risks means paying attention, for example, to reducing CO2 emissions and water consumption as much as possible, but also to paying wages in line with the market, making socially responsible investments and creating and ensuring a safe working environment for your staff.
Third-party risks
You undoubtedly work with various third parties. Think, for example, of software vendors and service providers (MSPs). These third parties increasingly have access to (part of) your data, which poses additional risks in terms of data and privacy protection. Checking and complying with SLAs is also part of this. After all, this prevents you from having the wrong idea about the services, practices and guarantees offered by a supplier or partner.
Business continuity risks.
Business continuity risks primarily relate to issues such as process interruptions and disruptions, disaster recovery and vendor lock-ins. Is there a scenario for dealing with and resolving disruptions? Is there a backup policy that allows you to get your IT environment back up and running quickly in the event of a disruption or successful cyber-attack? And aren’t you too dependent on one or a few MSPs or software vendors?
Compliance risks
Compliance risks are the consequences of not complying with laws and regulations. Examples include fines and extra costs for redesigning processes, but also reputation damage. These often stem from a failure to properly interpret SLAs and regulations, a lack of understanding of one’s own compliance policies or a poor separation of responsibilities in the areas of governance, data protection and process monitoring.
Maverick buying
‘Maverick buying’ is buying services or products outside of closed contracts. This leaves you with little insight into the security status of a product or service, but also leads to hidden costs.
Improve your GRC with process mining
Process mining can help you improve governance, risk management and compliance in several ways. Time to see how.
Reconstruct and improve
Process mining allows you to reconstruct data from your systems and processes – from the overarching strategic level down to the finest level of detail. So you can see how processes and routines in the areas of governance, compliance and risk management are running and easily identify bottlenecks and imperfections. Those insights are the starting point for concrete improvement projects. Unlike periodic sampling, process mining allows you to retrieve the correct and most up-to-date data and insights continuously and in real time.
Better internal audits
Process mining uses data visualization. This method comes in handy when conducting internal audits. The latest AI and ML techniques guide an auditor through the process and point out inefficiencies and potential compliance issues. The result? An in-depth analysis of governance policies and a real-time MRI scan of the organization. The insights gained will help you eliminate compliance risks.
Timely notifications
The insights provided by process mining enable organizations to set up a system of timely notifications. Is a violation detected? Or does something change in laws and regulations that requires action on your part? Then the employees responsible will automatically receive a notification or warning. This way, you reduce the chances of someone overlooking a compliance issue and take your risk management to the next level.
A holistic approach to GRC
Process mining allows you to take a holistic approach to GRC. Because process mining is based on a thorough analysis of logs that accurately dissect all actions and process components, data quality improves dramatically. With the right tools, you bring that data together in a central environment and present it in clear real-time dashboards. In this way, you allow all layers of the organization to benefit from the insights and predictive analyses you create using process mining.
Transparency in the value and costs of GRC
With process mining, you make the added value of GRC transparent using hard data. You see what it delivers and costs. Does the effectiveness of your internal control and risk management outweigh its costs? If not, process mining provides the tools for further improvement.
Learn More
Being and staying compliant with laws and regulations and minimizing compliance risks is a lot easier and less time and labor intensive when you harness the power of process mining. At Eqeep, we know the power of process mining and use it to quickly realize operational efficiencies and improved process knowledge and compliance for your organization.
Curious about what we can do for your organization? Then feel free to contact us without obligation by calling +31 (0) 30 209 92 70 or emailing us at info@deepvalue.com. You can also fill in this contact form on our website.
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