Managing global risk has become more complicated than ever. Risk managers must not only confront issues of maintaining global regulatory compliance concerning anti-money laundering (AML) and know your customer (KYC) standards but also contend with global events that cause marketplace uncertainty and often threaten to disrupt how organizations do business internationally.
“Developing An Infrastructure Risk And Control Strategy: How To Prepare For Black Swan Events,” a PYMNTS and Citi collaboration, looks at how organizations can effectively mitigate risk in times of sudden uncertainty without compromising their growth.
Resilience Begins With the Right Infrastructure
Organizations faced with sudden disruption in business operations — such as regional unrest — are unlikely to have the time to find and test a new solution that works for clients and customers needing fast and seamless payments.
We find that black swan events can compromise payments processing in seconds, making organizations scramble to get supply chains moving again. A sudden conflict might make specific payments flowing through a particular area subject to sanction, even if neither the sender nor the receiver is involved in a noncompliant transaction.
Even when organizations quickly find a new solution, the ability to maintain regulatory compliance is essential. According to the playbook, organizations should be proactive in their risk mitigation strategy and look for payments management solutions well before they are needed.
An organization’s ability to provide an alternative and compliant means of payment depend on its preparedness for black swan events or general marketplace uncertainty. According to the report, risk managers should look for a solution with global transaction monitoring for noncompliance risk and global payments management. An enterprise-grade solution that offers organizations access to a powerful banking network in tandem with user-friendly risk-management features (such as global transaction visibility) can help drive an organization’s risk mitigation strategy through uncertainty.
Key Features to Look for When Selecting a Tech Solution for Risk Management
Black swan incidents that may impact organizational stability may be caused by external events or internal challenges. Managing external and internal risk simultaneously with efficiency requires the right technology — and, often, a solutions partner. The audit necessary to determine what an organization needs to remain resilient in the face of sudden change is relatively simple, the report finds.
Organizations should identify key areas where their ability to compete may be compromised and analyze areas where their operations or infrastructure are vulnerable to common risks, such as poor transaction visibility or limited compliance monitoring capabilities.
In addition, the report reads, organizations should also prioritize aspects of their business where a competitive advantage can be developed or maintained despite the surrounding events. In some cases, the improvement or introduction of a new infrastructure feature, such as streamlined client onboarding or a comprehensive global banking solution for all new businesses, can help an organization prepare for change and support a growth strategy even in turbulent times.
The report lists three critical banking elements that are essential for risk management in crisis:
To learn more about how organizations can weather uncertainty and support growth, download the report.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More