In today's rapidly evolving financial landscape, automating financial risk management has become a critical priority for institutions.
According to recent studies, the AI risk, security, and trust management market is projected to reach a staggering £5.8 billion by 2032. This proves that financial risk management automation is already at the forefront of most people’s minds. The question, then, is - what is the best way to automate financial risk management?
Enter Vigilance™, an Award-winning fraud prevention tool developed by Company Watch, designed to streamline and enhance risk management processes. It empowers financial risk managers to navigate the complexities of modern financial risks with unprecedented efficiency and accuracy.
In this blog post, we cover the following:
- Why traditional methods of financial risk management fall short
- How Vigilance™ offers a better solution
Why traditional methods of financial risk management fall short
1. Risk of human error
In financial risk management, accuracy is paramount. Yet, manual data entry remains a significant source of error.
Studies show that human error rates in financial data entry can range from 0.55% to 4.0%, depending on the complexity of the task. The Association of Certified Fraud Examiners (ACFE) reports that 5% of a typical organisation's annual revenue is lost to business fraud, often facilitated by data entry errors.
2. Isolated decision making
Automated financial risk management procedures are inherently streamlined and standardised across the organisation using them. Manual assessments are often siloed, and require additional resources to integrate them.
Research shows that as many as 54% of finance organisations typically struggle when integrating risk data effectively across their enterprise.
3. Delayed response to financial risk
According to the IBM Cost of a Data Breach 2024 report, the average time to identify and contain a data breach in the financial sector is 219 days. Out of this, 168 days are spent on just identification. Moreover, as of 2024, the average cost of a data breach in the financial industry has increased to £4.8 million as of 2024.
There are two key takeaways from this. Firstly, most traditional methods of financial risk management are reactive, rather than proactive. This means that it is only after the risk has become significant, that procedures are put in place to tackle it. As the data shows, this eats up precious time.
Secondly, it is evident that dealing with risks after they have materialised is far more costly. This is because additional resources need to be used to clean up the damage.
How Vigilance™ offers a better solution
Vigilance™, our innovative fraud detection and prevention tool, addresses these shortcomings and more by streamlining financial risk management processes.
Here's how it benefits financial risk managers:
- Real-time risk monitoring and analysis, including email alerts
- Automated data collection and processing
- Standardised workflows for consistent risk assessment
- Enhanced compliance with evolving regulations
- Improved decision-making through data-driven insights
By leveraging automation, Vigilance™ empowers financial risk managers to focus on strategic risk mitigation rather than getting bogged down by routine tasks. This not only improves operational efficiency but also strengthens an organisation's overall financial health and resilience.
Moreover, with real-time data and insights, Vigilance™ allows you to stay ahead of the curve and address risks as they appear - and not when they have already caused real damage.
Recognised by financial risk managers in the credit industry
Vigilance™ has earned significant recognition in the financial sector, securing two prestigious accolades this year at the CICM British Credit Awards. Company Watch was honoured with the Supplier of the Year and Risk Management Awards - a nod to our contributions to automated financial risk management.
Vigilance™ has revolutionised how financial risk managers assess financial health and manage credit risks by offering proactive monitoring and unparalleled insights.
The tool's advanced algorithms analyse Companies House filings, identifying anomalies and potential risks before they escalate. This early warning system has proven invaluable for businesses making data-driven decisions, solidifying Company Watch's position as a leader in financial risk management within the credit industry.
Key takeaways
- Automation is key to effective financial risk management, with traditional methods falling short in the age of AI.
- Vigilance™ by Company Watch is a necessary weapon in any financial risk manager’s toolkit in the fight against fraud and financial risk.
