Leaders in Risk Management
Risk management is defined as the process of identifying, monitoring and managing potential risks in order to minimize the negative impact they may have on an organisation.
A good risk management process will help identify which risks pose the biggest threat to an organisation and provide guidelines for handling them.
KST has developed a range of innovative tools and technologically ambitious solutions that will help you to achieve the best risk management outcomes possible for your organisation.
How technology can help manage corporate risk
Ever since its conception, the Kings Secure Technologies group of companies has always been driven by innovation, and this extends to our risk management approach.
We believe that, in order to identify and manage risk effectively, it pays to incorporate technology into your risk management practices. Digital applications can streamline your risk management process and offer unique insights that might not be visible at first glance.
Technology can help you manage your corporate risk factors via:
- Automating regular tasks
- Providing a central repository for key information
- Making roles, responsibilities and deadlines clear
- Providing secure file sharing and communications
- In-built assessment formats that simplify auditing and compliance
- Offering user-friendly reporting functionality
- Calendars to schedule risk management tasks
- Entity relationship diagramming
4 Steps to Effective Risk Management
- Identify the risk: Risks can be internal or external, so include any events that could cause problems or benefits for the company. The first step of the risk management process is called the risk assessment. A risk assessment evaluates an organisation’s exposure to uncertain events that could impact its day-to-day operations.
- Evaluate the risk: After the risk assessment/analysis has been completed, a risk evaluation should take place, estimating the damage those events could have. Rank risks according to the likelihood of each outcome to see how severely a set risk could impact the company or its strategy. Low, medium, high probability and low medium high impact.
- Monitor the risk: Track variables and proposed possible threats, and calmly treat any problems that arise as your tracking system identifies changes.
- Treat the risk: Look at ways to reduce the probability of a negative risk and increase the probability of positive risks, preparing preventative and contingency plans as needed. The last step in the risk management process is risk treatment and response. Risk treatment is the implementation of policies and procedures that will help avoid or minimize risks. Risk treatment also extends to risk transfer and risk financing.
Once the risk assessment is complete, assign a strategy to treat the identified risks. Generally, there are four ways to handle a risk:
- Avoid the risk, or forfeit all activity that carries the risk, though this also means forfeiting all associated potential returns and opportunities.
- Reduce the risk, or make small changes to reduce the weight of both risk and reward.
- Transfer or share the risk, or redistribute the burden of loss or gain by entering partnerships or bringing on new entities.
- Accept the risk, or assume any loss or gain entirely; this is usually put into play for small risks where any loss can be easily absorbed by the entity.