How technology can enable

proactive risk management

Successfully navigating governance, risk and
compliance activities in the digital landscape
One bright spot for business amid uncertain times is that consumers say they trust An important component of proactive
business more now than before COVID-19 rocked the world. In August 2021, PwC risk management should be
conducted a Trust in US Business Survey that asked consumers, employees and implementing the right technologies to
business leaders what comes to mind when they think of trust. These three groups
help responsibly streamline the tasks
agreed on the top four elements that engender trust: data protection and cybersecurity,
treating employees well, ethical business practices and admitting mistakes. Sustainable
involved in managing risk, such as:
value chain management and transparency and reporting of ESG also made notable
appearances in the list of foundational trust elements.
9 Assessing
Risk management is a significant part of a big-picture trust strategy. How your business 9 Monitoring and detecting risks
handles activities like audits, controls testing and monitoring, and third-party relationships,
9 Complying with regulatory requirements
can determine reputational integrity as well as customer relationships and employee
loyalty. Successful risk management strategies—and the right technologies to help your 9 Monitoring and testing controls and
organization execute on those strategies—are critical to building trust. centralizing data collection
9 Document review

As the worst of the pandemic fallout eases up, companies in all

industries should focus on strengthening stakeholder trust as they
execute on their strategies to emerge stronger.

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Tech-enabled risk management to
strengthen trust and stretch resources

A robust risk management program can play Technologies that enable ongoing risk visibility, Risk management isn’t just about compliance,
a central role in deepening stakeholder trust. monitoring and assessment have changed the risk diligence and cybersecurity. Its purpose is to
Additionally, the law and culture at large are management landscape, turning the tide in the favor protect a company, its customers, stakeholder and
demanding higher standards in the risk of businesses that want to operate legally, ethically business partners from involvement with, or being
management space. To answer these demands, and in full compliance with applicable regulations for harmed by, people and entities engaged in illegal
companies can implement intelligent tech to get data protection and related safeguards. activity. This can include theft and fraud––or even
ahead of risks before they cause reputational, bad behavior that’s not only against the law, but
financial or societal harm. Tech solutions can also help risk centers that are ethically reprehensible, like human trafficking and
grappling with limited and diminishing resources. exploitation. Proactive risk management is good for
Return on investments in risk management and Intelligent automation and cloud-based solutions the business and good for society because it fights
compliance effectiveness can be hard to quantify, accessible to all the necessary stakeholders help crime and reinforces ethical business practices
but with threats multiplying all the time, inaction is risk teams do more with less. How? By making it through prevention.
not an option. And managing risk using manual, possible to demonstrate the effectiveness of data-
siloed processes carried out by teams that can’t driven analytics in addressing risk management There’s been an upsurge in anti-money laundering
easily collaborate is an outdated approach that challenges. A proactive, tech-enabled risk (AML) efforts in the last five years or so, for example.
didn’t work well before the digital era. Today’s management program can help companies preserve In response, the US Treasury Department’s Financial
environment warrants a more integrated, tech- integrity, potentially stop bad actors in their tracks, Crimes Enforcement Network (FinCEN) has issued
powered approach. and further strengthen trust. lists of AML and related priorities it expects
companies to focus on.

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Quantifying the value of prevention

Risk compliance effectiveness can be hard to quantify, but that’s what

business leaders want before they approve investments in enterprise risk
management solutions or personnel. Risk management solutions that have
built-in analytics make it easy to see how the tools are being used, and what’s
working, in order to paint a fuller picture of your risk posture and processes.

Traditional governance, risk and compliance (GRC) approaches can’t keep up

with the pace at which bad actors are devising new schemes. But technology
solutions help make it possible to level the playing field by:

ƒ Automating risk management model validation, documentation and

governance

ƒ Providing data and analytics capabilities that centralize information and

provide real-time insights, including monitoring third parties

ƒ Automating operation and testing of compliance activities and risk

monitoring

Integrating such solutions into your risk management program can help
deliver on compliance excellence, which should be the goal.

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The compliance excellence imperative

Risk teams in companies subject to European Union regulations are familiar with If you don’t invest in compliance
the EU’s General Data Protection Regulation (GDPR), which requires businesses excellence, you could pay a steep
to protect the personal data and privacy of EU citizens for transactions that occur
price—literally. If your competitors
within EU member states—and imposes steep fines for noncompliance. According
to the GDPR Enforcement Tracker, between July 2018 and October 2021, the EU
are more focused on compliance
has issued 807 fines for GDPR noncompliance totaling €1,279,414,052, an average excellence than you, then customers,
fine of €1.59 million each. business partners and stakeholders
that put their trust in your business
In the US, the Department of Justice (DOJ) is stepping up its compliance
may jump ship. It’s also a way to win
expectations as well. Updated guidance from the DOJ released in July 2020 hones
in on whether companies are using data effectively to improve and track how well more business. About half (49%) of the
their compliance programs are doing. In other words, the DOJ expects companies customers in our Trust in US Business
to implement policies and processes aimed at achieving compliance excellence. Survey said they started purchasing
or purchased more from a company
because they trusted them.
The ability to see actual data and data-driven diagnostics is
only possible using risk management solutions designed with
compliance excellence in mind.

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How the right tech can help you
achieve compliance excellence

In superhero films, we want the good guys to vanquish the villains and keep the
world safe from disaster. Employing the right risk management solutions and
approaches can help you become the vanquishing hero in a world increasingly
populated by new and different villains engaged in money laundering, cybercrime,
corruption or other illegal activity.

Technology can become your superpower in this quest, but you need to know what
to look for, including:

ƒ A single repository that can help drive risk decisions and run analytics to gain
visibility into potential risks.

ƒ Automated data ingestion to provide real-time visibility and enable ongoing

monitoring of internal processes and third-party activity in a risk context.

ƒ Responsible AI models that can run risk assessments and generate

recommendations across risk and compliance programs.

ƒ Digitization to enhance workflow efficiency, reduce manual errors and enable data
standardization to drive reliability, maintain integrity and provide searchable audit
trails for improved decision-making.

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PwC is serving risk leaders with SaaS solutions that address their key challenges: staying ahead of continuous regulatory
requirements, creating end-to-end wrappers around complex risk problems and lowering costs. We bring our consulting
experience in the regulatory space to bear in developing solutions that help organizations address risk management
challenges more effectively—even as the risk landscape continues to change.

PwC can help you achieve compliance excellence with six key PwC product offerings:

1. Ready Assess 2. Third Party Tracker 3. Interactions Hub

Empowers your organization to think faster and Helps companies screen and manage third An inclusive digital solution that helps
act quicker to stay on top of the ever-changing parties, identify upfront risks from potential pharmaceutical and life sciences companies
world of risk. It streamlines risk assessments into partners, conduct due diligence, and monitor create an integrated, seamless experience
a single platform—making the entire process through the lifecycle of the relationship. for managing interactions with healthcare
visual, interactive, trackable and actionable. organizations/providers and patients while
enabling global transparency reporting at scale.

4. Risk Detect 5. Model Edge 6. Enterprise Control

Gives you quick, efficient access to key data This digital platform helps internal and external This governance, risk and compliance portal
points, including transactions, loan document stakeholders better understand your models, has an integrated analytic engine that can
compliance and more. making it easier to identify potential bias, detect be connected to your ERP or other business
model degradation and demonstrate how they work applications so you can automate the operation
more effectively. Even your most advanced models and testing of compliance activities while
become transparent and explainable, enabling providing an approach to monitoring systemic
stakeholders at every level across the enterprise. risks proactively in one, end-to-end risk and
control platform.

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Trust: A main benefit of compliance excellence

With so much at stake, companies should make risk

management excellence a priority to maintain resilience and
hold on to stakeholder trust. Our Trust in US Business Survey
found that 48% of business leaders said having an ethical and
sustainable supply chain is extremely important—and 44% said
that they’ve taken steps to achieve this as part of their overall
efforts to strengthen stakeholder trust in their organization.

Lawful, ethical business practices are among the environmental,

social and governance (ESG) priorities compliance leaders
are looking to highlight in their efforts to deepen trust in
their organizations and with their stakeholders. A robust
risk management program that strives for true compliance
excellence offers numerous benefits. Employing intelligent
risk management solutions that complement your compliance
team’s field experience can help you achieve these payoffs
faster and more affordably.

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Learn more about how PwC’s Risk Management Portfolio can help you
successfully navigate governance, risk and compliance activities.

© 2022 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please
see pwc.com/structure for further details. This content is for general information purposes only and should not be used as a substitute for consultation
with professional advisors. 1167026-2022